2016/2017 Annual Report - Thames-Coromandel District › Global › 1_Your Council ›...

2016/17ANNUAL REPORT

2Message from the Chief Executive and Mayor | Mai i te Kaiwhakahaere Wahine a Te Meia

3Introduction | Whakataki

3What is the Annual Report?

3Council's vision, values and outcomes

4Independent auditor's report

8Highlights

11Overview of our financial performance

16Statement of service performance | Ngā Tauakī Whainga

16Introduction

18Roads and footpaths activity group

21Stormwater activity group

23Wastewater activity group

25Water supply activity group

29Solid waste activity group

30Representation activity group

31Planning and regulation activity group

35Protection of people and the environment activity group

39Community spaces and development activity group

53Economic development activity group

55Financial statements | Ngā Tauakī Pūtea

55Guide to financial statements

56Statement of compliance

57Statement of comprehensive revenue and expense

58Statement of financial position

59Statement of changes in equity

59Statement of cash flows

61Notes to the financial statements

114Funding impact statements disclosure

114Introduction

114Funding impact statements | Ngā Tauakī Whakaaweawe Pūtea

125Council Controlled Organisations | Ngā Kūao ā te Kaunihera

129Council policies | Ngā Kaupapa Here ā Kaunihera

1Thames-Coromandel District Council

Message from the Chief Executive and Mayor | Mai i teKaiwhakahaere Wahine a Te MeiaAn Annual Report provides a snapshot of what Council has been delivering during the year. 2016/17 has been a busy year.We have delivered on 84% of our capital works programme - a significant positive improvement on previous years. The totalCouncil operational spend this year was $80 million, which was in line with our budgets for the 2016/17 Annual Plan and hadus in a strong enough financial position to respond to some big costs from serious weather and fire events. We are proud ofbeing an organisation that is reasonably resilient in response to emergency events.

Our coastal infrastructure has seen some upgrading with the TairuaWharf and boat ramp development completed. With 400kmof coastline, our District enjoys the benefits and challenges of having an array of coastal communities, and coastal infrastructure.More work needs to be done on our boat ramps and marine facilities as funding allows. We also need to contemplate whateffect climatic changes may have on our coastal communities. For this reason we have been working on a range of strategiesrelating to coastal management and coastal hazards. We look forward to receiving community feedback on these inOctober/November 2017.

Council completed the upgrade to the Thames water supply and brought forward the other upgrades for the district to ensurewe comply with the NZ Drinking Water Standards. Our investment in core infrastructure is timely as local stormwater andwastewater systems have been put under pressure by the weather events of the last six months and the nationwide focus onsafe drinking water has renewed community interest in our water networks. We continue to engage with the challenge ofproviding infrastructure (whether it be water, wastewater or solid waste) that provides a level of service that meets the expectationsof our resident and peak season visitor populations - and the demands of central government.

There has been a focus on our community and recreational facilities across the district, with the development of walkways thatprovide an improved amenity and leisure option for residents and visitors alike. The second stage of the Mercury Bay Cemeterycontinues; and preparations for the Mercury Bay town centre upgrade are well underway for commencement in 2018.

The Thames Skate Park, Pepe Loop Track and Thames Indoor Sports Facility are an example of what can be achieved whenCouncil works with interested groups and stakeholders. We were successful in receiving a government grant for upgradingthe Hot Water Beach toilets. Formation of meaningful partnerships and pursuing user pays options are all ways we will look toensure the "best bang for our buck" - and reducing the burden on our ratepayers.

In 2017 Rob, our Chief Executive, took some time to evaluate how the organisation is actually responding to the needs of ourcommunities. This culminated in a change in organisational structure which we are confident will ensure we deliver the bestservice to you, our customers.

Our staff and elected members are currently working together to develop a 2018-2028 Long Term Plan proposal. This setsout the types of projects we propose to undertake during this time period, and how these are prioritised and funded. Yourknowledge and understanding of this district is important to us, and we wholeheartedly encourage you to read, engage with,and contribute feedback, to this document in March/April 2018.

Rob WilliamsSandra GoudieChief ExecutiveMayor


Introduction | WhakatakiWhat is the Annual Report?In June 2015 the Council adopted its 2015-2025 Long Term Plan. This second annual report of that Long Term Plan focuseson the new performance measures and levels set as part of the new Long Term Plan and reflects an update in Council's missionand vision.

For every activity we explain what we did compared to what we said we’d do, what it cost and how we performed againstbudget:

to ensure consistent decisions and actions are made across our businessto show the public what we've achieved, what we haven't achieved and to provide transparency on our decision-makingprocesses to the publicto be efficient in the way we work – one well thought-out decision in the form of a policy can be applied to many cases,and staff working within the business have a framework to help them get on with the jobto meet legal requirements.

On 27 June 2017 we adopted the Annual Plan for 2017/2018. While this does not impact on our reporting for the 2016/2017year or change any of our performance targets or levels of service, it is an important document for understanding our programmefor this year. You can check it out on our website by going to http://www.tcdc.govt.nz/ap2017

Council's vision, values and outcomesCouncil’s visionWewill be a leading District Council in New Zealand through the provision of quality services and facilities, which are affordable,and delivered with a high standard of customer service. We will earn respect, both as a good community citizen and throughour support of community organisations, economic development and the protection of the environment. Through our actions,the Coromandel will be the most desirable area of New Zealand in which to live, work and visit.

Council’s valuesDisplaying empathy and compassionFiscally responsible and prudent with ratepayers moneyIntegrity, transparency and accountability in all our actionsTreating all employees fairly and evenly in accordance with good employer practiceBeing a great place to work where staff are inspired to be the best they canWorking with and having meaningful and on-going consultation with all of our communitiesCreating strong partnerships with our district’s iwiHaving pride in what we doBeing a highly effective and fast moving organisation

Council outcomesOn behalf of the Coromandel Peninsula, the Council will aim to achieve:

A prosperous district - the Coromandel Peninsula has a prosperous economyA liveable district - the Coromandel Peninsula is a preferred area of New Zealand in which to live, work and raise a familyand have a safe and satisfying life, andA clean and green district - the Coromandel Peninsula's natural environment provides a unique sense of place

All of our groups of activities contribute to these outcomes apart from the protection of people and the environment group ofactivity which contributes to a liveable district, and a clean and green district only.


Independent auditor's report

Independent Auditor’s Report

To the readers of Thames-Coromandel District Council’s annual report for the year ended 30 June 2017

The Auditor-General is the auditor of Thames-Coromandel District Council (the District Council). The Auditor-General has appointed me, Athol Graham, using the staff and resources of Audit New Zealand, to report on the information in the District Council’s annual report that we are required to audit under the Local Government Act 2002 (the Act). We refer to this information as “the audited information” in our report.

We are also required to report on:

whether the District Council has complied with the requirements of Schedule 10 of the Act that apply to the annual report; and

the completeness and accuracy of the District Council’s disclosures about its performance against benchmarks that are required by the Local Government (Financial Reporting and Prudence) Regulations 2014.

We refer to this information as “the disclosure requirements” in our report.

We completed our work on 31 October 2017. This is the date on which we give our report.

Opinion on the audited information

In our opinion:

the financial statements on pages 55 to 113:

present fairly, in all material respects:

the District Council’s financial position as at 30 June 2017;

the results of its operations and cash flows for the year ended on that date; and

comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Entity Reporting Standards;

the funding impact statement on page 114, presents fairly, in all material respects, the amount of funds produced from each source of funding and how the funds were applied as compared to the information included in the District Council’s annual plan;

the Statement of service performance on pages 16 to 54:

presents fairly, in all material respects, the District Council’s levels of service for each group of activities for the year ended 30 June 2017, including:

the levels of service achieved compared with the intended levels of service and whether any intended changes to levels of service were achieved;


the reasons for any significant variation between the levels of service achieved and the intended levels of service; and

complies with generally accepted accounting practice in New Zealand; and

the statement about capital expenditure for each group of activities on pages 19 to 54, presents fairly, in all material respects, actual capital expenditure as compared to the budgeted capital expenditure included in the District Council’s Annual plan; and

the funding impact statement for each group of activities on pages 115 to 124, presents fairly, in all material respects, the amount of funds produced from each source of funding and how the funds were applied as compared to the information included in the District Council’s annual plan and Long-term plan.

Report on the disclosure requirements

We report that the District Council has:

complied with the requirements of Schedule 10 of the Act that apply to the annual report; and

made the disclosures about its performance against benchmarks that are required by the Local Government (Financial Reporting and Prudence Regulations 2014) on pages 11 to 15, which represent a complete list of required disclosures and accurately reflects the information drawn from the District Council’s audited information and, where applicable, the District Council’s long-term plan and annual plans.

Basis for opinion on the audited information

We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. We describe our responsibilities under those standards further in the “Responsibilities of the auditor for the audited information” section of this report.

We have fulfilled our responsibilities in accordance with the Auditor-General’s Auditing Standards.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the audited information.

Responsibilities of the Council for the audited information

The Council is responsible for meeting all legal requirements that apply to its annual report.

The Council’s responsibilities arise under the Local Government Act 2002 and the Local Government (Financial Reporting and Prudence) Regulations 2014.

The Council is responsible for such internal control as it determines is necessary to enable it to prepare the information we audit that is free from material misstatement, whether due to fraud or error.

In preparing the information we audit the Council is responsible for assessing its ability to continue as a going concern. The Council is also responsible for disclosing, as applicable,


matters related to going concern and using the going concern basis of accounting, unless there is an intention to amalgamate or cease all of the functions of the District Council or there is no realistic alternative but to do so.

Responsibilities of the auditor for the audited information

Our objectives are to obtain reasonable assurance about whether the audited information, as a whole, is free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers taken on the basis of this audited information.

For the budget information reported in the audited information, our procedures were limited to checking that the budget information agreed to the District Council’s annual plan.

We did not evaluate the security and controls over the electronic publication of the audited information.

As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

We identify and assess the risks of material misstatement of the audited information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District Council’s internal control.

We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Council.

We determine the appropriateness of the reported intended levels of service in the statement of service performance, as a reasonable basis for assessing the levels of service achieved and reported by the District Council.

We conclude on the appropriateness of the use of the going concern basis of accounting by the Council and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast a significant doubt on the District Council’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the related disclosures in the audited information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or conditions may cause the District Council to cease to continue as a going concern.


We evaluate the overall presentation, structure and content of the audited information, including the disclosures, and whether the audited information represents, where applicable, the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Council regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other Information

The Council is responsible for the other information included in the annual report. The other information comprises the information included on pages 2 to 3, 8 to 10, but does not include the audited information and the disclosure requirements.

Our opinion on the audited information and our report on the disclosure requirements do not cover the other information.

Our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the audited information and the disclosure requirements, or our knowledge obtained during our work, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Independence

We are independent of the District Council in accordance with the independence requirements of the Auditor-General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1 (Revised): Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board.

In addition to the audit and our report on the disclosure requirements, we have carried out an assurance engagement on the District Council’s debenture trust deed and have started work on the Council’s 2018 to 2028 Long Term Plan. These assurance engagement are compatible with those independence requirements.

Other than the audit, our report on the disclosure requirements and the assurance engagement, we have no relationship with or interests in the District Council.

Athol Graham Audit New Zealand On behalf of the Auditor-General Auckland, New Zealand


HighlightsWe did a lot in the 2016/17 year. We've had some great highlights, along with a few challenges. These are shared below foreach of our activities.

Coromandel-Colville community spaces and developmentThe Coromandel Town Centre Guidelines which had been developed over several years, including the formation of a stakeholderworking group and public consultation, were adopted. All departments, agencies and the local business association will receive acopy to guide any future developments.

We worked with the Coromandel Area School on a joint project to resurface the multi-purpose courts. These look great andhave improved the playing surface for the use of school students and the wider community.

Various other projects are underway and will inform the 2018-2028 Long Term Plan in the 2017/18 year. These include progresson the Hauraki Road Bike Park, Jack Point Boat Ramp, Hauraki House land swap, and the Huaroa Street and WhangarahiWalkways.

Mercury Bay community spaces and developmentWith the lifespan of the Ferry Landing Cemetery coming to an end, work has begun on building a new cemetery in MercuryBay. The new cemetery is in its second stage with the sealing of the main access road, and development of a circular car park,an entrance way, and berms for a section of burial plots. This work will be continued in 2017/18 year.

A draft parking strategy and action plan was developed to provide better planning and infrastructure for public parking, alongwith transport and tourist information within the Mercury Bay South area. The draft strategy was based on feedback from keystakeholders and our Coromandel Walk project partners, DOC, Ngati Hei and an independent traffic report.

The Whitianga town centre upgrade was consulted on as part of the 2017/18 Annual Plan with work on stage one intended tobegin in early 2018.

Tairua-Pauanui community spaces and developmentTairua wharf and boat ramp development began in March 2017 and includes demolition of the old wharf, construction of a newwharf and re-attachment of the existing wharf pontoon and pedestrian bridge. The existing boat ramp will be widened andextended to improve boat launching at low tide, along with the addition of two new floating pontoons off the boat ramp. Theopening of the new wharf and boat ramp is planned for September 2017.

A 21m pedestrian bridge has been added to the Pepe Loop Track in Tairua which is part of a larger project to add on to theexisting walkway. This is a project is a collaboration between Council and the Walks Tairua Society.

Thames community spaces and developmentWe completed and opened the new Thames Skate Park. This was a collaborative project between Council, Powerco andThames Revolution Crew. The Thames Revolution Crew are a group of young local people who began work with the Councilto replace the old skate park when it became apparent the old site could no longer be used. The work on Porritt Park is all partof an upgrade that has also seen a new toilet block and new playground equipment.

We have also almost completed the Indoor Sports Facility at Thames High School. For many years, sports clubs and the highschool have been constrained by the limited facilities available in the Thames area for indoor sports. High school teams andcommunity sports clubs have been competing for the limited space and time available and this situation has not allowed forprogramme growth. The $5.5 million facility is a joint project between Council, Thames High School and the Thames Sportand Education Community Trust.

Whangamata community spaces and developmentWork was undertaken to complete theWilliamson Park upgrade. This included construction of a boardwalk along the beachfront,toilet refurbishment, road realignment, and formalisation of the car park. In addition, many of the old pine trees that werereaching the end of their life span and dropping branches were removed. In their place, native trees suited to the coastalenvironment were planted to provide shade.

Unfortunately in Whangamata (and across the district), we have had attacks on Pohutukawa trees on the beach reserves. Wehave been working with the community to raise awareness of how to communicate with Council to resolve tree related issueswithout taking matters into their own hands.

Roads and footpathsWe completed the Pukorokoro/Miranda to Thames leg of the Hauraki Rail Trail. This will be officially opened in the 2017/18year. This project included funding from NZ Transport Agency for a clip-on cycle lane attached to the downstream side of thePiako Bridge. This spans the Piako River on State Highway 25, providing a safe crossing for trail users and road cyclist.


In 2016 Council made the decision to close the section of Bluff Road indefinitely pending the identification of any cost-effectiveoptions that would allow the road to be made safe to reopen for public use. Unfortunately there haves been issues with safetyfences being cut and warning signs being vandalised. Therefore we have been reinforcing to the public this road is closed forpublic safety and should not be accessed.

We also worked alongside Brake, a national road safety charity to promote the Global Road Safety Week which ran from 8-14th May 2017. The focus was on speed and what could be done to address key risk factors for road traffic deaths and injuries.

StormwaterWe had several large scale weather events during the year which tested our stormwater systems. As the majority of calls duringweather events go straight to Emergency Services or Civil Defence it is difficult for us to understand the overall impact offlooding to habitable flooring during these events.

WastewaterWith the large scale weather events we experienced this year it also placed pressure on our wastewater systems with anincrease in system faults and blockages.

Water supplyA new water supply was successfully established to provide safe and drinkable water for the Colville village. The water supplyusers contribute towards the cost of infrastructure and will pay an annual levy for filter cleaning, system inspection and generalmaintenance.

With the recent nationwide focus on safe drinking water, concern was raised at the quality of Coromandel's drinking water.After testing it was found that these concerns were unfounded and there was no risk to the health and safety of residents.Council has completed the upgrade to the Thames water supply and brought forward all the other upgrades to the 2017/18financial year to comply with the NZ Drinking Water Standards.

Solid waste (rubbish and recycling)The joint Waste Management and Minimisation Plan (WMMP) was adopted by Council in June 2017. This was undertaken incollaboration with Hauraki and Matamata-Piako District Council's. Our WMMP sets the priorities and strategic framework formanaging waste. Actions set out in the Plan will be carried forward into the three councils' long term and annual plans to ensureresourcing is available to deliver the plan's goals and objectives.

The Seagull Centre in Thames received additional grant funding this year which allowed further site development. The Centrewhich opened in 2008 with a grant of $50,000 from Council and a lease of Council land at the entrance of the refuse transferstation now has a turnover of $250,000 annually and employs a staff of 12 who work alongside a team of volunteers.

RepresentationThe 2016 Local Government Elections saw the election of 29 representatives from our communities. This saw the election ofour new Mayor, Sandra Goudie who had previously held roles as a Thames Coromandel District Councillor and as a Memberof Parliament. Voter turnout for the district was up slightly at 53% from the previous election in 2013.

A youth / Council partnership group was established to explore how our Council could facilitate an initiative that would not onlyaccommodate a youth voice, but would also encourage it. We have developed, with the help of the Coromandel Youth Collective,a Youth Voice model as an avenue for the districts youth to discuss their ideas and highlight issues and opportunities that areimportant to them.

Grants and remissionsThe Community Boards allocated $70,000 in Local Economic Development Grants and discretionary funds to community-basedorganisation with projects aimed at developing visitor facilities. Some of these included grants to set up a functioning steamengine in time for the 150th anniversary of the proclamation of the Thames Goldfields, signage in the Tairua Forest for theWhangamata Mountain Bike Park and production of promotional material for the walkways and cycle ways in the northern partof the peninsula.

Strategic planningWe consulted on five bylaws this year relating to the Activities in Public Places, Property Maintenance and Nuisances, Advertisingand Signage, Fires in the Open and Traffic Control. Easter Sunday Trading Policy. Three of those were adopted with theAdvertising and Signage Bylaw adopted in September of 2017.

We also developed an Easter Trading Policy which received significant support during public consultation. Submitters highlightedthe benefits of the new policy as including greater financial security for business owners and operators, and meeting the needsof both locals and visitors. Submitters also noted their support for exempting employees from working on Easter Sunday in linewith the exemptions provided for in the Shop Trading Hours Act 1990.


District planThe Proposed District Plan was made available on our website. The Appeals version shows which parts of the Plan are subjectto an appeal to the Environment Court. These areas are highlighted. Guidance is provided on the implementation of theplan. There were 72 appeal received to the Proposed District Plan and as of at the end of June 2017, 33 of the appellants hadpartial or full resolution, 27 were resolved in full (with 3 withdrawn) and 24 consent orders or determinations of the court.

Resource consentsWe saw a further increase in resource consent applications over the financial year with 395 consents lodged over the past 12months compared to 386 lodged over the previous financial year. Even with the increase we have seen an improvement in ouroverall processing times.

Building controlWe introduced pre-lodgement interviews to help people submit building consent applications. Pre-lodgement interviews are anopportunity to meet with a technical officer of the Building Control Unit to go over your paperwork before the application islodged to prevent delays due to missing information.

A number of building and planning roadshows were also held over February 2017. These focused on how to improve the qualityof resource and building consent applications to reduce the number of rejections and requests for further information. We alsoused this as an opportunity to share with stakeholder recent changes to the recent Building (Pools) Amendment Act 2016.

We joined the Waikato Building Consenting Group. The eight member councils work collaboratively to ensure consistentadministration of building consents across all eight councils.

Community health and safetyThe new Dog Control Bylaw came into effect. In response, we provided a summary of each area of the bylaw on our website.This was to help people to adjust to the new rules.

Council also partnered with selected camper van rental hire companies to target unpaid freedom camping fines. This will makeif more difficult for tourists attempting to leave the country without paying their fines.

Emergency managementFollowing a large scrub fire that broke out on Comers Road south of Whitianga, the Thames Valley Civil Defence OperatingCentre was activated and assisted with the evacuation of residents and provision of a welfare centre. We set up a Mayoralfund to help those affected by the fire which came to just over $15,000 with contributions from people and organisations allover the district.

Coastal and hazard managementWork has progressed on the development of a district wide Coastal Management Strategy. Community engagement will occurin the 2017/18 year and include a series workshops around the peninsula and engagement with iwi. The new strategy willinform the 2018-2028 Long term Plan work programme.

Economic developmentWe were successful in our application to the Government for its extension of the Ultra-Fast Broadband programme. Six of ourcommunities were included in 151 areas chosen. These include Thames, Te Puru, Coromandel Town, Whitianga, Whangamataand Tairua-Pauanui. Thames is one of the first areas to have this installed with the others following over the next seven years.

Funding was provided for a stall at the Auckland Food show where five artisan food businesses paid to sell their wares. Thestand was designed and dressed as a "Coromandel Bach" and each exhibitor had their own space to showcase their productswith tastings and sales. More than 30,000 foodies flocked to the show this year. Attendance at the show helps to promote the2017 Coromandel Food Trail Guide which aims to attract tourists to the array of cafes, restaurants and artisans food producerson offer around peninsula.

We also opened a newly built track as part of our Coromandel Walks project which branches off the existing Cathedral CoveWalk and provides a loop return, with a viewing platform about halfway down the track.


Overview of our financial performanceLocal Government (Financial Reporting and Prudence) Regulations 2014Our Ten Year Plan sets out our financial strategy, which includes a set of self-imposed financial parameters that guides whatwe deliver and how we make decisions on funding and expenditure. For further detail about the financial strategy, please referto our 2015-2025 Long-Term Plan. The Local Government (Financial Reporting and Prudence) Regulations 2014 came intoforce on 1 May 2014. Part 2 of the regulations requires us to disclose in our Annual Report our financial performance in relationto various benchmarks. This section details our performance against the financial parameters that we have set, which includesour performance against the Local Government (Financial Reporting and Prudence) Regulations 2014 prescribed benchmarks.

Annual Report disclosure statement for the year ended 30 June 2017What is the purpose of this statement?The purpose of this statement is to disclose the Council's financial performance in relation to various benchmarks to enablethe assessment of whether the Council is prudently managing its revenues, expenses, assets, liabilities and general financialdealings. The Council is required to include this statement in its Annual Report in accordance with the Local Government(Financial Reporting and Prudence) Regulations 2014 (the regulations). Refer to the regulations for more information, includingdefinitions of some of the terms used in this statement.

Rates affordability benchmarkThe Council meets the rates affordability benchmark if;

its actual rates income equals or is less than each quantified limit on rates; andits actual rates increases equal or are less than each quantified limit on rates increases.

Rates (income) affordabilityThe following graph compares the Council's actual rates income with a quantified limit on rates contained in the financial strategyincluded in the Council's Long-Term Plan. The quantified limit is that rates are capped at 80% of total revenue. Council's ratesare within the quantified limit.

Rates (income) affordability

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Rates (increases) affordabilityThe following graph compares the Council's actual rates increases with a quantified limit on rates increases included in thefinancial strategy included in the Council's Long-Term Plan. The quantified limit is that rates will increase by no more than LocalGovernment Cost Index (LGCI) plus 2%. Council's rates are within the quantified limit.

Rates (increases) affordability

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2012/13 2013/14 2014/15 2015/16 2016/17

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Quantified limit on rates increase Actual rates increase (at or within limit) Actual rates increase (exceeds limit)

Debt affordability benchmarkThe Council meets the debt affordability benchmark if its actual borrowing is within each quantified limit on borrowing. Thefollowing graphs compare the Council's actual borrowing with the quantified limits on borrowing stated in the financial strategyincluded in the Council's Long-Term Plan. The quantified limits are that debt will remain within 150% of rates revenue, and thatinterest on external debt will be greater than or equal to 15% of rates revenue. The Council's borrowing is within these quantifiedlimits.

External debt limit

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Interest on external debt

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Quantified limit on interest on external debt Actual interest on external debt

Balanced budget benchmarkThe following graph displays the Council's revenue (excluding development contributions, financial contributions, vested assets,gains on derivative financial instruments, and revaluations of property, plant or equipment) as a proportion of operating expenses(excluding losses on derivative financial instruments and revaluations of property, plant or equipment). The Council meets thisbenchmark if its revenue equals or is greater than its operating expenses. The Council did not meet this benchmark for the2012/13, 2013/14 and 2014/15 years. This is partly due to the loss on disposal of assets and the fact that we intended not tofully fund from rates the depreciation on the additional capacity component of the Eastern Seaboard wastewater plantsconstructed in Tairua-Pauanui, Whitianga, andWhangamata and the subsidised portion of roading for these years. This decisionwas based on the premise that it would not be equitable for the existing ratepayer to fund the depreciation on the portion ofthese wastewater plants that were constructed for the benefit of future ratepayers, or on roading that has already beensubsidised.

Balanced budget

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2012/13 2013/14 2014/15 2015/16 2016/17

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Benchmark met Benchmark not met


Essential services benchmarkThe following graph displays the Council's capital expenditure on network services as a proportion of depreciation on networkservices. The Council meets this benchmark if its capital expenditure on network services equals or is greater than depreciationon network services. The Council did not meet this benchmark for the past five years. The reason is mostly related to the largeamount of relatively new infrastructure (e.g. three wastewater plants) which will not require renewals for many years yet. Thefact that we did not complete 100% of our capital expenditure programme also impacts on this benchmark. The Council isfunding depreciation and building depreciation reserves towards the time that major renewals are required.

Essential services

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2012/13 2013/14 2014/15 2015/16 2016/17

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Debt servicing benchmarkThe following graph displays the Council's borrowing costs as a proportion of revenue (excluding development contributions,financial contributions, vested assets, gains on derivative financial instruments, and revaluations of property, plant and equipment).Because Statistics New Zealand projects the Council's population will grow more slowly than the national population growthrate, it meets the debt servicing benchmark if it's borrowing costs equal or are less than 10% of its revenue. The Council'sborrowing costs were well within the limit set.

Debt servicing

4.9%

4.1% 4.0%

3.4% 2.7%

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4.0

6.0

8.0

10.0

12.0

2012/13 2013/14 2014/15 2015/16 2016/17

Bo

rro

win

g c

osts

/reven

ue (

%)

Year

Benchmark met


Debt control benchmarkThe following graph displays the Council's actual net debt as a proportion of planned net debt. In this statement, net debt meansfinancial liabilities less financial assets (excluding trade and other receivables). The Council meets the debt control benchmarkif its actual net debt equals or is less than its planned net debt. The Council's borrowing was well within the limit set.

Debt control

79%

69%

61%

80% 79%

40

60

80

100

2012/13 2013/14 2014/15 2015/16 2016/17

Ac

tua

l/b

ud

ge

ted

ne

t d

eb

t (%

)

Year

Benchmark met

Operations control benchmarkThis graph displays the Council's actual net cash flow from operations as a proportion of its planned net cash flow fromoperations. The Council meets the operations control benchmark if is actual net cash flow from operations equals or is greaterthan its planned net cash flow from operations. The Council's cash flows met the benchmark.

Operations control

113% 110% 118%

153%

101%

0

20

40

60

80

100

120

140

160

2012/13 2013/14 2014/15 2015/16 2016/17

Actu

al/

bu

dg

et

net

cash

flo

w f

rom

op

era

tio

ns

(%)

Year

Benchmark met


Statement of service performance | Ngā Tauakī WhaingaIntroductionFor the purpose of our 2015-2025 Long Term Plan, Council arranged its services into the following activity groups and activities:

ActivitiesActivity Groups

Roads and footpathsRoads and footpaths

StormwaterStormwater

WastewaterWastewater

Water supplyWater supply

Rubbish and recyclingSolid waste

RepresentationRepresentationGrants and remissions

Strategic planningPlanning and regulationDistrict planResource consentsBuilding control

Community health and safetyProtection of people and the environmentEmergency managementCoastal and hazard management

Thames community spaces and developmentCommunity spaces and developmentCoromandel-Colville community spaces and developmentMercury Bay community spaces and developmentTairua-Pauanui community spaces and developmentWhangamata community spaces and development

Economic developmentEconomic development

In this statement of service performance section we report against what we planned to do in year two (2016/17) of our LongTerm Plan, for each of our activities (ordered by group of activities). At the start of each group of activities section there's abrief description to explain what it's about, and an overview of performance against our non-financial performance measureswithin the group.

By activity, we've set out the performance measures we determined as part of our service delivery planning (they're in our2015-2025 Long Term Plan). We've reported what we said we'd do and what we actually did (how well we performed). Wherewe've got comparative performance data for previous years we've provided that as well.


Summary of statement of service performanceBelow is a summary of performance presented by each Council activity. Specific information on the results for each performancemeasure, including commentary from staff on why these measures may or may not have been met, can be found on the groupof activity and activities pages.

50%

78%

83%

63%

40%

50%

100%

80%

67%

67%

83%

100%

80%

82%

57%

100%

33%

22%

17%

23%

60%

50%

100%

100%

100%

20%

33%

100%

33%

17%

20%

9%

43%

17%

15%

9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Roads and footpaths, 6 measures

Stormwater, 9 measures

Wastewater, 12 measures

Water supply, 40 measures

Rubbish and recycling, 5 measures

Representation, 2 measures

Grants and remissions, 1 measure

Strategic planning, 1 measure

District plan, 1 measure

Resource consents, 2 measures

Building control, 5 measures

Community health and safety, 6 measures

Coastal and hazard management, 1 measure

Emergency management, 3 measures

Coromandel-Colville, 6 measures

Mercury Bay, 9 measures

Tairua-Pauanui, 10 measures

Thames, 11 measures

Whangamata, 7 measures

Economic development, 1 measure

Percentage of performance measures

Achieved Not achieved Not measured


Roads and footpaths activity groupThe roads and footpaths activity group includes our roads and footpath activity. Through this activity group we provide planning,provision, development, operations and maintenance of a district land transportation network; as well as local facilities includingtown centre facilities, footpaths, service lanes, street lighting, bridges and car parks (this excludes the state highway loop). Theactivity includes:

A safe and resilient transport networkComfortable and fit for purpose roadsFootpaths, walkways and cycleways that enable active modesStreet lighting in urban centresLocal public transportTown centre upgrades

Roads and footpaths - 2016/17 performance results

CommentsResultTargetYearPerformance measure

Level of service: The Council will ensure its roads are safe

Result is 2 serious injurycrashes between 1 Julyand 30 June 2017.

2AchievedLess than orequal to theprevious yearwhich was 8

2016/17The change from theprevious financial year inthe number of fatalitiesand serious injurycrashes on the local road

8Achieved≤122015/16network (expressed as anumber)

Level of service: The design, maintenance and management of roads and footpaths ensures they are in goodcondition and fit for purpose

The programmed area ofresurfacing was not

68,973m2Not achievedThe annualprogrammed

2016/17Percentage of the sealedlocal road network that isresurfaced achieved as the area ofarea of

resurfacing**78,960m²excluding

second coatseals

resurfacing used tocalculate the target areaincluded sites thatshouldn't have beenused, namely secondcoat sealing and reserve

203,420m²excluding

Not achievedThe annualprogrammed

2015/16 carpark sites. Althoughthese sites were

second coatarea ofresurfacing**227,405m²excluding

resurfaced we have notincluded these areas inthe 'actual' quantity as themeasure relates to road

seals, 6.2% ofthe sealed

local networksecond coat resurfacing only (whichseals, 6.9% of excludes 2nd coat roadthe sealed

local networkseals or any otherresurfacing of off-roadareas such as reserve,water services and solidwaste activity accessroads and car parks).

Road roughness is onlymeasured for the full

NotmeasuredNotmeasured≥90%2016/17The average quality ofride on a sealed local

89%Not achieved≥90%2015/16 sealed road networkevery second year.

road network, measuredby smooth travelexposure Not measured≥80%2014/15 Therefore a result for

smooth travel exposure90%Achieved≥80%2013/14 cannot be determined in

2016/17.


CommentsResultTargetYearPerformance measure

TCDC's triennial footpathcondition rating survey

96%Achieved≥95%2016/17Percentage of footpathsmeeting condition ratingone to three Not measured≥95%2015/16 was completed in April

2017.

Monthly cyclic inspectionsdemonstrate the level of

94%Achieved≥90%2016/17Percentage of unsealedroad complying withquality requirements 80%Not achieved≥90%2015/16 compliance with unsealed

road levels of service arebeing met.

Level of service: The Council provides a responsive maintenance service to address identified faults and repairs

There were 14 out of 16footpath issues and 18

84%Not achieved≥85%2016/17Percentage of customerservice requests relating

75%Not achieved≥85%2015/16 out of 22 potholes beingto roads and footpaths**completed withinto which Counciltimeframe. Improvementsresponds within the Long

Term Plan timeframe in reporting from TCDC'sRFS system has enabledimproved contractorresponse times forfootpath trip hazards. Asignificant improvementis noted compared to thatachieved in 2015/16.

** Footpath and road defects with their applicable timeframes:

Remedied withinDefect

48 hoursTrip hazard greater than 30mm

1 monthTrip hazard 10 to 30mm

48 hoursDepression greater than 30mm

1 monthDepression 10 to 30mm

1 weekPotholes and sealed roads

Financially significant projects identified in the 2016/2017 Annual Plan

Comment

2017AP budget

($000)

2017Actual($000)

Project

The extension of the cycleway from Kopu to Miranda was almostcompleted by year end. The remaining budget has been carriedforward to the 2017/2018 financial year to fundThames-Coromandel District Council's contribution to completethe project.

1,095944Hauraki Rail Trail

This is a multi-year project to upgrade theWhitianga Town Centre.Stage One is from Albert Street to Taylors Mistake. Consultationdesign have been completed and the tender awarded.913351

Whitianga TownCentre Upgrade

Construction of stage one is planned to commence in March 2018.The remaining budget has been carried forward to the 2017/2018financial year.


Comment

2017AP budget

($000)

2017Actual($000)

Project

Severe weather events experienced in the latter part of thefinancial year delayed completion of this project. The remainingbudget has been carried forward for completion in the 2017/2018financial year.

843720

Whangamata curband channel


Stormwater activity groupThe stormwater activity group includes our stormwater and land drainage activity. Stormwater is the result of heavy or sustainedrainfall resulting in the need to manage the disposal of surface water. We have a number of stormwater systems throughoutour district to manage run-off and reduce surface water ponding (which can lead to risks to public health and safety and damageto property) and to avoid dangerous road conditions. Our stormwater systems includes around 200 kilometres of stormwaterpipes, more than 3,000 manholes and four pump stations.

Stormwater - 2016/17 performance results

CommentsResultYear endtarget

YearPerformance measure

Level of service: The Council's stormwater services protect habitable areas from flooding

The TCDC area sufferedfrom several large scale

2Not achieved02016/17Number of floodingevents

1Not achieved02015/16 weather events this year.Many calls during the

1Achieved≤12016/17For each flooding eventthe number of habitable

weather events wentstraight to Emergency

0.04Achieved≤12015/16floors affected (per 1,000connected properties)

Services/ Civil Defence todeal with and didn’t come

0Achieved<252014/15 through Councils'Request for Service'system.1 habitable floor levelflooding was reportedduring these events.

0Achieved<222013/14

Level of service: The Council minimises the environmental impact of protecting habitable areas from flooding

Number of operational resource consent conditions not complied with throughout the year:

Waikato Regional Councilissues and monitors our

0Achieved02016/17Total for all enforcementactions

0Achieved02015/16 resource consents for ourstormwater activity.No enforcement actionwas taken against

0Achieved02016/17Number of abatementnotices

0Achieved02015/16 Thames-CoromandelDistrict Council during the

0Achieved02016/17Number of infringementnotices

year by the WaikatoRegional Council.

0Achieved02015/16

0Achieved02016/17Number of enforcementorders

0Achieved02015/16

0Achieved02016/17Number of successfulprosecutions

0Achieved02015/16

Level of service: The Council provides a responsive stormwater request service

There was an average of27minutes response time

27 minutesAchieved≤3 hours2016/17The median responsetime to attend a flooding

22 minutesAchieved≤3 hours2015/16 to attend flooding eventsover the reporting year.

event, measured from thetime Council receivesnotification to the timethat service personnelreach the site




77 complaints werereceived during the last

5.34Not achieved≤52016/17Number of complaintsreceived about the

2.21Achieved≤52015/16 period due to the largeperformance of thestorm events. 128stormwater system (percomplaints were receivedin total for the year.

1,000 connectedproperties)


Comment

2017AP budget

($000)

2017Actual($000)

Project

The budget for this project was revised down to $74,210 during theyear because part of the land that was originally budgeted for wasdeemed unnecessary to acquire.

50559Kopu stormwaterland purchase

This project is for the design and construction of stormwaterimprovements to increase stormwater capacity and reduce floodinundation risk for properties around Sarah Avenue in Whitianga.

739162

Whitianga SarahAvenue

Construction of the improvements has been delayed to the 2017/2018financial year due to adverse weather conditions and a protractedtender process. The remaining budget has been carried forward withan estimated completion date of the end of October 2017.


Wastewater activity groupOur wastewater activity group includes our wastewater activity and covers the collection, treatment and safe disposal ofwastewater (sewage) from households and businesses within currently serviced urban communities. Delivering these services helpto protect the environment and public health. We operate 10 wastewater systems (in Cooks Beach, Coromandel, Hahei,Matarangi, Oamaru Bay, Onemana, Tairua-Pauanui, Thames,Whangamata andWhitianga). Assets for this activity include pipednetworks, pumping stations, manholes and treatment plants.

Wastewater - 2016/17 performance results



Level of service: Adequate wastewater services for household and business use will be provided in currentlyserviced urban communities

Veolia's informationsuggested 23 overflows

0.6Achieved≤12016/17Number of dry weathersewerage overflows from

0.8Achieved≤12015/16 but once checked againstthe territorial authority’srain fall data the total wassewerage system (perreduced. 11 in total dry1000 connections to that

sewerage system) weather over flows thisyear.

Level of service: Council will respond as required to faults and complaints received from its customers

The total number of complaints about wastewater per 1,000 connected properties:

8 complaints wererecieved for the year.

0.44Achieved≤12016/17Odour

1.14 per 1,000connectedproperties

Not achieved≤12015/16

119 complaints werereceived in total for the

6.5Not achieved≤22016/17System faults


Not achieved≤22015/16 year. A large number ofthese are as direct resultof the storm events thisyear.

66 blockages werereported due to the storm

8.2Not achieved≤22016/17Blockages


Not achieved≤22015/16 events - 150 in total forthe year. Veolia's code for"blockages attended" hasbeen used as "blockagesreported" via the callcentre. This is oftenmiscoded depending onthe customersdescription.

2 issues were reported intotal for the year.

0.11Achieved≤22016/17Response to issues withthe wastewater system

0Achieved≤22015/16


34 minute average over207 requests for service.

34 minutesAchieved≤2 hours2016/17Median response time forattendance from the time

40 minutesAchieved≤2 hours2015/16that Council receivesnotification of a fault orblockage to the time thatservice personnel reachthe site




10.28 hrs was theresponse time for quarter

10hrs, 17minutes

Achieved≤24 hours2016/17Median response time fora resolution from the time

four. The average for allCouncil receives5 hours, 17minutes

Achieved≤24 hours2015/16 quarters was 10hrs and17 mins over the 207requests for service.

notification to the timethat service personnelconfirm resolution of theblockage or other fault


Number of operational resource consent conditions not complied with throughout the year:

No enforcement actionwas taken against

0Achieved02016/17Total for all enforcementactions

0Achieved02015/16 Thames-CoromandelDistrict Council during the

0Achieved02016/17Number of abatementnotices

quarter by the WaikatoRegional Council.

0Achieved02015/16

0Achieved02016/17Number of infringementnotices

0Achieved02015/16

0Achieved02016/17Number of enforcementorders

0Achieved02015/16

0Achieved02016/17Number of successfulprosecutions

0Achieved02015/16


Water supply activity groupThe water supply activity group includes our water supply activity; and covers the provision of water to residential, commercialand industrial connections in the district and the treatment of water to ensure it is safe for our communities to use. Councilserves 10 water supply schemes in the district, operates nine water treatment facilities and has three rural water supplieslocated south of Thames.

Water supply - 2016/17 performance results



Level of service: The Council provides safe and reliable water for household and business use in urban areas

Compliance with drinking water standards (bacteria, part 4 of the standards):

There is a project in thecurrent year to upgrade

Not compliantAchievedNot compliant2016/17Thames South

Not compliantAchievedNot compliant2015/16 the Thames watertreatment plant to meet

Compliant***AchievedCompliant2016/17Thames the NZ Drinking WaterStandards, 2005 (2008).

Not compliantAchievedNot compliant2015/16 This means thatcompliance with the

Not compliantAchievedNot compliant2016/17Coromandel standards will not be untilthe following year of

Compliant***Not achievedNot compliant2015/16 operation. While still to beapproved as part of the

Compliant***Not achievedNot compliant2016/17Matarangi Annual Plan, theremaining treatment

Compliant***Not achievedNot compliant2015/16 plants have beenidentified for the required

Compliant***Not achievedNot compliant2016/17Whitianga upgrades in the 2017/18financial year.

Not compliantAchievedNot compliant2015/16

Compliant***Not achievedNot compliant2016/17Hahei

Compliant***Not achievedNot compliant2015/16

Compliant***Not achievedNot compliant2016/17Tairua


Compliant***Not achievedNot compliant2016/17Pauanui


Not compliantAchievedNot compliant2016/17Onemana


Not compliantAchievedNot compliant2016/17Whangamata


Compliance with drinking water standards (protozoal, part 5 of the standards):

There is a project in thecurrent year to upgrade

Not compliantAchievedNot compliant2016/17Thames South

Not compliantAchievedNot compliant2015/16 the Thames watertreatment plant to meet

Not compliantAchievedNot compliant2016/17Thames the NZ Drinking WaterStandards, 2005 (2008).

Compliant***Not achievedNot compliant2015/16 This means thatcompliance with the




Not compliantNot achievedCompliant2016/17Coromandel standards will not be untilthe following year of

Not compliantAchievedNot compliant2015/16 operation. While still to beapproved as part of the

Not compliantAchievedNot compliant2016/17Matarangi Annual Plan, theremaining treatment

Compliant***Not achievedNot compliant2015/16 plants have beenidentified for the required

Not compliantAchievedNot compliant2016/17Whitianga upgrades in the 2017/18financial year. There was

Not compliantAchievedNot compliant2015/16 an error made when thetargets were set.

Not compliantAchievedNot compliant2016/17Hahei Thames, due to theupgrades being

Not compliantAchievedNot compliant2015/16 undertaken during the2016/17 year was

Not compliantAchievedNot compliant2016/17Tairua anticipated to becompliant, not theCoromandel system.Not compliantAchievedNot compliant2015/16

Not compliantAchievedNot compliant2016/17Pauanui


Not compliantAchievedNot compliant2016/17Onemana


Not compliantAchievedNot compliant2016/17Whangamata


Level of service: The Council promotes the efficient and sustainable use of water

Water loss figures for theother water supplies are

Percentage of real water loss from the local authority’s networked reticulation system(medium schemes 2,500 to 10,000 connections, small schemes <2,500 connections):

not available at this time.44%Not achieved≤39%2016/17Thames (medium)* Work is programmed in

the current year and first36%Achieved≤39%2015/16 year of the 2018-28 Long

Term Plan to install outlet42%Not achieved≤37%2016/17Coromandel (small)* metering on all reservoirs

to accurately measure28%Achieved≤37%2015/16 and monitor via SCADA

the volumes of water14%Not achieved≤13%2016/17Pauanui (small)* entering the networks.

This will also allow30%Not achieved≤13%2015/16 greater monitoring of

night flows which willNot availableNotmeasured≤40%2016/17Thames South (small)** enable better information

on leakage to beNot availableNot achieved≤40%2015/16 gathered. This is

particularly relevant forNot availableNotmeasured≤45%2016/17Matarangi (small)** the townships without

residential metering.61%Not achieved≤45%2015/16 Following the reservoir

metering works beingNot availableNotmeasured≤25%2016/17Whitianga (medium)** completed; additional

zone meters will be13%Achieved≤25%2015/16 installed. These will

provide even greaterNot availableNotmeasured≤50%2016/17Hahei (small)** versatility for interrogating




the networks andtargeting water loss in aprioritised way.

39%Achieved≤50%2015/16

Not availableNotmeasured≤40%2016/17Tairua (small)**

38%Achieved≤40%2015/16

Not availableNotmeasured≤60%2016/17Onemana (small)**

23%Achieved≤60%2015/16

More accurate data isnow being utilised to

443 litres perresident per

day

Achieved≤650 litres perresident per

day

2016/17The averageconsumption of drinkingwater per day perresident (currently based

understand and calculatethe consumption of

737 litres perresident per

day

Not achieved≤650 litres perresident per

day

2015/16on normally residentpopulation)

drinking water across themetered townships. Thishas resulted in a reducedper person figure.

Level of service: The Council provides a responsive call-out service to attend to customers issues with their watersupply

Response times haveremained steady over allquarters.

18 minutesAchieved≤2 hours2016/17Median response time forattendance for urgentcall-outs from the time 13 minutesAchieved≤2 hours2015/16that the local authorityreceives notification tothe time that servicepersonnel reach the site

1hr 47 minsAchieved≤24 hours2016/17Median response time forresolution for urgent

2 hours and 5minutes

Achieved≤24 hours2015/16call-outs from the timethat the local authorityreceives notification tothe time that servicepersonnel confirmresolution of the fault orinterruption

37 minutesAchieved≤5 days2016/17Median response time forattendance for non-urgent

37 minutesAchieved≤5 days2015/16call-outs from the timethat the local authorityreceives notification tothe time that servicepersonnel reach the site

3hrs 15minutes

Achieved≤5 days2016/17Median response time forresolution for non-urgentcall-outs from the time

3 hours and 35minutes

Achieved≤5 days2015/16that the local authorityreceives notification tothe time that servicepersonnel confirmresolution of the fault orinterruption




12 Clarity complaintswere received for theyear (1 in Quarter 4)No complaints for Taste& Odour were receivedfor Quarter 46 pressure complaintswere received in Quarter4 (33 for the year)29 complaints aboutcontinuity of supplywere

Number of complaints - The total number of complaints received per 1,000 connections:

0.68Achieved≤22016/17Clarity

0.57Achieved≤22015/16

0.5Achieved≤22016/17Taste

0.23Achieved≤22015/16

0.23Achieved≤22016/17Odourrecevied in Quarter4(total of 86 for the year)0.17Achieved≤22015/16

1.87Achieved≤52016/17Pressure

0.4Achieved≤52015/16

4.87Achieved≤52016/17Continuity of supply

6.18Not achieved≤52015/16

0.17Achieved≤32016/17Response to above

0.06Achieved≤32015/16

* These schemes have universal metering and use an Annual Water Balance methodology

** These schemes do not have meters and use Minimum Night Flow methodology (used to monitor water loss from Council'swater supply networks that do not have residential water meters). Recorded flow of water through the unmetered residentialsupply networks at night during a time when normal water use is recorded to be minimal (because most people are sleeping),for example 2-3am, is used as indicative of leaks. The minimum night flow rate is calculated as a percentage of day timeflow to give an approximate percentage water loss for each of Council's unmetered water supply networks.

*** Although the target was to be not compliant, we did comply with the standard for this water supply network


Comment

2017AP budget

($000)

2017Actual($000)

Project

This is a multi-year project to improve the Thames South water suppliesin Matatoki, Puriri and Omahu. The budget was revised up to $1,207,869during the year to include the unspent budget from the prior year. The

8971,232

Thames Southwater

work packages planned for 2016/2017 were completed on time. Costswent over budget because we were able to start part of the work plannedfor 2017/2018. Total costs over the past three financial years on thisproject are $1,786,015.

The costs to upgrade the UV filters at the Thames water treatment plantcame in well under budget. Council made a decision in February 2017to bring forward future work planned for other water treatment plants inthe District to the 2017/2018 financial year.

429143

Drinking WaterStandards upgrade


Solid waste activity groupThe solid waste activity group includes our rubbish and recycling activity. We provide ways for rubbish to be properly disposedof to protect public health and the environment. We also promote recycling, reuse and resource recovery with the objectivesof reducing the amount of waste going to landfill and practising responsible resource efficiency. In addition to a weekly kerbsiderefuse and fortnightly recyclables collection service, the Council manages closed landfill sites and operates transfer stationswhere waste and recycling can be dropped off. While we are not obliged to provide waste management services directly, weare required to ensure that services are provided within our district. We are also required to promote effective and efficientwaste management and minimisation within our district.

Rubbish and recycling - 2016/17 performance results



Level of service: Rubbish and recycling kerbside pickup services are provided to solid waste rated residentialproperties in all urban and most rural areas

There was a continuedfocus on improvement in

5 streets and91 properties

Achieved≤36 streetsand ≤156properties

p.a.

2016/17Number of missedproperties or wholestreets where collectionsdid not happen

this area with thecontractor.

9 streets and69 properties

Achieved≤36 streetsand ≤156

properties p.a.

2015/16

The solid wastecontractor has failed to

71%Not achieved≥92%2016/17Missed household refuseservice requests

80%Not achieved≥90%2015/16 respond within theresponded to by the nextday (on validation) required timeframe.

Continued work will bedone with the contractorin this area.

Level of service: The Council facilitates waste minimisation practices and promotes reduction of the amount ofwaste going to landfill

Waste to landfill is up11% (56kg per rating

553kgNot achieved≤474kg perrating unit

2016/17Kilograms of Councilcontrolled waste per

unit) compared to2015/16.The increased buildingactivity in the district, and

rating unit being disposedof to landfill (per ratingunit)

497kgNot achieved≤474kg perrating unit

2015/16

467kgAchieved≤474kg perrating unit

2014/15 the disposal of flooddamaged items arethought to have

463kgAchieved≤474kg perrating unit

2013/14 contributed to theincrease.

Recycled materialquantity has decreased

398kg perNot achieved≥438kg perrating unit

2016/17Kilograms of recyclingmaterial diverted fromlandfill (per rating unit) relative to 2015/16. This

444kg perrating unit

Achieved≥433kg perrating unit

2015/16 has been attributed tomisreporting of tonagesby the contractor prior to2017.

Level of service: The Council maintains closed landfill sites

No formal warnings werereceived.

0Achieved02016/17Number of formalwarnings issued by the

0Achieved02015/16Waikato Regional Councilfor non-compliance withresource consent(s) 1Not achieved02014/15


Representation activity groupThis activity group includes our representation and grants and remissions activities.

Representation: The Mayor and Councillors focus primarily on district-wide decisions and issues. They are supported by localcommunity boards, which represent their communities, ensure local views and aspirations are known, considered and advocatedfor. The community boards make decisions on local issues and activities and have a role in representing local communityaspirations and concerns to assist in district-wide Council decision-making.

Grants and remissions:Our grants and remissions activity provides support to community organisations to build their capacityto assist in developing a strong and connected community. Council actively collaborates with organisations to achieve efficientuse of resources, strong partnerships and financial assistance contributing to greater community cohesion. This is achievedby service level agreements, the administration of grants for community groups and events and administration of rates remissions.

Representation - 2016/17 performance results



Level of service: Councillors and Community Board members can demonstrate to ratepayers their commitment tothe democratic process

Cumulative result shownQ1 = 86%Q2 = 100%Q3 = 95%Q4 = 87%

92%Achieved≥80%2016/17Attendance rate atCouncil and CommunityBoard meetings 86%Achieved≥80%2015/16

Level of service: Council is committed to transparent decision-making

A larger proportion ofagenda items than

13%Not achieved≤10%2016/17The proportion of agendaitems which are publiclyexcluded 17%Not achieved≤10%2015/16 projected required public

excluded decisionmakingdue to the circumstances.

Grants and remissions



Level of service: The Council promotes community empowerment through supporting community-driven initiatives

The Tairua-PauanuiCommunity Board made

99.46%Not achieved100%2016/17Percentage of fundsdistributed that comply

99.30%Not achieved100%2015/16 a grant outside the criteria- they noted it was a way

with the Council'scommunity grant criteria

100%Achieved100%2014/15 that they can support theHikuai community by

100%Achieved100%2013/14 contributing to costsassociated with the fundraising event for theschool.


Planning and regulation activity groupThis group of activities is made up of the following activities: strategic planning, district plan, resource consents, building control.

Planning is important not only to meet the needs of our local and visitor communities ahead of change; but also so that we canretain the diversity, character and natural values that the Coromandel Peninsula community believes makes the peninsulaspecial.

Strategic planning: This activity is about planning for a sustainable future through informed decision-making, which balancesvaried community aspirations with legal and practical requirements. Associated with this activity is preparation of a long termplan, an annual plan (in the years when a long term plan is not required) and an annual report (like this one) to monitorperformance.

District plan: This activity involves the preparation, monitoring and maintenance of the Thames-Coromandel District Plan,which provides a framework to implement and support appropriate subdivision and land use management in the district.

Resource consents: This activity is principally about processing resource consent applications and ensuring that alldevelopments and activities are consistent with the District Plan and the Resource Management Act 1991 (RMA).

Building control: This activity involves implementing a regulatory process to ensure buildings are safe, have the attributesthat contribute to health and physical independence and to do so in a manner that promotes sustainable development. Thereare two distinct components to our building control activity:

Building consenting for processing, inspecting and certifying building workBuilding enforcement to ensure compliance with legislation and related requirements

Our building control activity incorporates Land Information Memoranda (LIMs) which are reports issued by the Council, onrequest, about a particular property or piece of land. LIMs help protect buyers of property and provide important informationfor building development project planning.

Strategic planning - 2016/17 performance results



Level of service:

The Revenue andFinancing Policy andRating Policy had been

1 of 3milestonescompleted.

Not achievedStrategicPlanningwork

2016/17Proportion of workprogramme milestonescompleted (strategies,

signalled but earlyprogrammepolicies, bylaws, researchprojects e.g. peakpopulation study)

workshops did notconfirm that consultationwas necessary.

milestones asdefined in2016/17Annual Plan*

All threemilestonescompleted.

AchievedStrategicPlanning workprogramme

2015/16

milestones for2015/16 asratified byCouncil**

*Strategic Planning work programme milestones as defined in the 2016/17 Annual Plan:

Undertake a review of Council's Revenue and Financing Policy to be ready for public consultation, in conjunction withfinance staff.Undertake a review of Council's Rating Policy to be ready for public consultation, in conjunction with finance staff.Complete a review of the Council's strategic direction with the new council following the 2016 local body election.

**Strategic Planning work programme milestones for 2015/16 as ratified by Council:

A binding referendum on the addition of fluoride in the Thames Community Board area water supply takes place in 2015,followed by a declaration/public notice of the result.The Dog Control Bylaw is developed and reviewed following consultations, hearings, and deliberations prior to Counciladopting the new bylaw.An organisation wide Strategy Framework document is approved by Council.


District plan - 2016/17 performance results



Level of service:

Two of the threemilestones werecompleted. The Line of

Two out ofthree

milestonescomplete

Not achievedDistrict planworkprogrammeas defined in2016/17Annual Plan*

2016/17Proportion of workprogramme progressedto complete andimplement District Plan Enquiry was established

and operational (fortesting by CustomerServices) by 31 March

All sixmilestonescompleted

AchievedDistrict Planworkprogramme

2015/16 2017 and but was notavailable via Council'swebsite until 1 May 2017.

milestones for2015/16 asratified byJudicialCommittee**

CompletedAchievedHearing ofsubmissionscompleted

2014/15

CompletedAchievedProposed Plannotified forsubmission

2013/14

*District plan work programme as defined in the 2016/17 Annual Plan:

Report to the 28 September 2016 Council meeting on the number and complexity of appeals to the Environment Court.An 'Appeals Version' of the Proposed District Plan available by 1 October 2016.Line of Enquiry established and operational by 31 March 2017.

**District Plan work programme milestones for 2015/16 were ratified by Council (rather than Judicial Committee dueto a timing issue) on:

A 'natural character' and 'coastal environment line' variation to the Proposed District Plan publicly notified by October2015.'Draft' Proposed Plan decisions available from the District Plan Hearings Panel by October 2015.'Draft' amended Proposed Plan prepared by staff and available by end December 2015.A 'recommended decisions' version of the Proposed District Plan available for Council approval by March 2016.All submitters and further submitters responded to with Council approved 'decisions' and 'reasons' by April 2016.The 'decisions version' of the Proposed Plan available via the Council's website by April 2016.


Resource consents - 2016/17 performance results



Level of service: The Council ensures that resource and other consent applications are processedwithin the statutorytimeframe

There were 395 consentslodged over the past 12

99.5%Achieved≥98%2016/17Percentage of acceptedresource consent

99.7%Achieved≥98%2015/16 months compared to 386consents lodged over the

applications areprocessedwithin statutorytimeframes 99.4%Not achieved100%2014/15 previous financial year. A

total of 393 consents98.7%Not achieved100%2013/14 were processed within

statutory timeframes.

A total of 65 certificateswere issued over this

94%Achieved≥90%2016/17Percentage of 224certificates of compliance

92%Achieved≥85%2015/16 period of which 4 wentover the 20 daytimeframe.

issued within 20 workingdays (provided all thecorrect information isprovided)

88%Not achieved100%2014/15

85%Not achieved100%2013/14

Building control - 2016/17 performance results



Level of service: The Council processes, inspects and certifies building work applications

New dwelling applicationsare up 18% over the year.

89%Not achieved≥98%2016/17Percentage of acceptedbuilding consent

98%Achieved≥98%2015/16 This increase along withstaffing resourcing issues

applications areprocessed ≤20 workingdays 99%Achieved≥98%2014/15 has created this

non-achievement.98%Achieved≥98%2013/14 Extensive recruitment

campaigns failed toattract suitablecandidates with only oneappointment of anexperienced processingofficer being made inJanuary 2017. As at 30June 2017 there are 4processing vacanciesincluding the TeamLeader position. Currentstaff are achieving resultsby contracting outprocessing work and byworking overtime.Contractors have at timesalso struggled to meetstatutory timeframes andhave caused overruns forTCDC. The averageworking days to consentdecision has reducedfrom 19 in September2016 to 14 at 30 June2017. Of the 1205




applications withdecisions, 1072 wereprocessed within thestatutory timeframes and133 were over time.

Of the 776 applicationdecisions over the year,

99.61%Achieved≥98%2016/17Percentage of Code ofCompliance Certificates

97%Not achieved≥98%2015/16 773 were processedprocessed ≤20 workingdays within the statutory

timeframe.

Level of service: Commercial buildings containing specified systems will be managed to ensure they comply withthe NZ Building Code

Over the year 41premises have been

11.80%Achieved≥10%2016/17Proportion of BuildingWarrant of Fitnessesaudited annually 12%Achieved≥10%2015/16 audited, from a total of

348 on Council's registerat 30 June 2017.

Level of service: Swimming pools comply with the Fencing of Swimming Pools Act

From 1 January 2017Fencing of Swimming

97.47%Achieved≥85%2016/17Percentage of pools onour register are compliant

60%Not achieved≥80%2015/16 Pools Act is repealed andcompliance requirements

with or working towardsthe requirements under

76%Not achieved100%2014/15 are now under Building(Pools) Amendment Act

the Fencing of SwimmingPools Act

76%Not achieved100%2013/14 2016. Over the year 177premises were inspected,of which all passed or areworking towardscompliance.

Level of service: Customers can purchase a LIM they have confidence in, in a timely manner

Over the year 1490applications were

100%Achieved100%2016/17Percentage of standardLIMs processed within 10days 100%Achieved100%2015/16 processed within the

statutory timeframe.100%Achieved100%2014/15

100%Achieved100%2013/14


Protection of people and the environment activity groupThis activity group includes the following activities: community health and safety, emergency management, coastal and hazardmanagement.

This group of activities provide services which help protect people's health and safety, regulates behaviour that creates nuisanceto others, plans to avoid and manages the impact of natural hazards on communities and the environment.

Community health and safety: This activity provides a range of services to ensure our communities are clean, safe andhealthy places to live. This includes minimising public nuisances and offensive behaviour, as well as helping ensure publicplaces are safe. Key services include animal control, liquor control, health licensing and bylaws.

Emergencymanagement: This activity focuses on communities being ready for, responding to, and recovering from emergencieswhen they happen. Work is undertaken through the Emergency Operating Centre.

Coastal and hazard management: This activity plans for avoidance and management of the impact from natural hazardsacross the whole of the Coromandel Peninsula, with a particular focus on coastal settlements. Studies have been undertakenthat help to inform communities and plan for hazards.

Community health and safety - 2016/17 performance results



Level of service: Food premises are monitored to ensure they are producing safe food

The team has beenfocussing on educating

91%Not achieved100%2016/17Percentage of foodpremises inspected

89%Not achieved100%2015/16 business owners aroundthe transition to the new

100%Achieved100%2014/15 food act which has had aslight impact on

100%Achieved100%2013/14 resources and the abilityto inspect all premises inthe year. We haveinspected 313 of 344premises.

Level of service: Parking and freedom camping restrictions are monitored and managed/enforced

The team has met thetarget for responding to

94%Achieved≥90%2016/17Responsiveness torequests for service

98%Achieved≥90%2015/16 customer requests forservice for parking andfreedom camping.

Level of service: Regulate the sale and supply of alcohol

This measure has beendifficult to meet for the

78%Not achieved≥99%2016/17Percentage ofnon-objected applications

85%Not achieved≥99%2015/16 second year in a row. Theare assessed andreason being that theprepared for the Districtwindow for Police, theLicensing Committee toMedical Officer of Healthmake decisions in ≤20

days and the public to object toan application is 15working days whichleaves us with 5 workingdays to complete ourinquiries and report onapplications. We reportedon 382 of 499applications within 20working days.

Level of service: The Council provides animal control services to avoid dog attacks and nuisances




All 53 properties withclassified dogs wereinspected in the year.

100%Achieved100%2016/17Percentage of annualinspections on propertieswith dogs classified asdangerous or menacing

100%Achieved100%2015/16

100%Achieved100%2014/15

100%Achieved100%2013/14

The compliance staffreport response times to

100%Achieved≥98%2016/17Percentage of urgentanimal control issuesresponded to ≤2 hours 100%Achieved≥98%2015/16 urgent animal control

issues. All issues were100%Achieved100%2014/15 reported as being

responded to within 2hours.100%Achieved100%2013/14

Level of service: We will respond to noise issues to minimise the impact on others

Noise contractors reporton the number of jobs

98.05%Achieved≥98%2016/17Percentage of noiserequests for service that

99.8%Achieved≥98%2015/16 that they attend and howmany are responded to

are responded to ≤2hours

100%Achieved≥98%2014/15 within 2 hours. We havemet the measure and the

98%Achieved≥98%2013/14 score is consistent acrossthe previous 3 years.

Coastal and hazard management - 2016/17 performance results



Level of service: The Council will work with other agencies to manage the effects of natural hazards

This work is planned tobe completed in the2017/18 year.

In progress tobe completedin 2017/18

year

Not achievedCompletion ofa coastal

managementstrategy

2016/17Work programmesprogressed with otheragencies to manage theeffects of natural hazards

which informsthe districtwide work

programme inresponding to

coastalhazards

Workprogramme

Not measuredTarget not set2015/16

was not put toCouncil soperformancecould not bemeasured


Emergency management - 2016/17 performance results



Level of service: The Council will support its communities in enabling them to be resilient and able to respond to,and recover from emergencies

These plans are stillunder developmentAll new CommunityResponse Plans (CRP)

Not achievedNot achievedPlanscompleted:ThamesTe PuruKuaotunu*Opotere/Onemana*Plans underdevelopment:Cooks BeachTapuThamesCoastPort Charles*Colville*

2016/17Community responseplans are developed inconsultation with localcommunities andagencies at a settlementlevel

will be further developedpending the outcome ofthe service deliveryreview with TVEOA.Onemana and Opouterehave completed theircommunity responseplans.

Hikuai is tohave a

Not AchievedPlanscompleted:WhangamataPauanui/HikuaiTairuaPlans underdevelopment:ThamesTe PuruKuaotunu*Opoutere/Onemana*

2015/16

separate plandeveloped in2016/17

Level of service: The Council will be prepared for and able to respond to emergencies

TCDC Fire forcesattended 93 incidents in

100%Achieved100%2016/17Accept responsibility forrural fire incidents withinone hour of notification 100%Achieved100%2015/16 16/17 year all within an

hour of the notification.

4 separate trainingexercises as part of

4Achieved≥32016/17Number of civil defencetraining exercisesconducted per annum 6Achieved≥32015/16 National Civil Defence

Tangaroa 2016.6Achieved12014/15

3Achieved12013/14

* These communities have volunteer rural fire parties and the Principal Rural Fire Officer will work with them to formulatetheir plans using a template.



Comment

2017AP budget

($000)

2017Actual($000)

Project

This project was originally for the construction of a third stage of theBuffalo Beach rock wall. Following construction of the second stageof the rock wall, the Mercury Bay Community Board adopted a soft

5490Buffalo Beachcoastal erosion

structure approach (planting and sand dune work) to erosionmanagement in the Mercury Bay coastal erosion programme. Theimplementation of planting and sand dune systemwork will be deliveredfollowing adoption of the Coastal Erosion Strategy.


Community spaces and development activity groupThis activity group includes an activity for each of our Community Board areas:

Coromandel-Colville community spaces and developmentMercury Bay community spaces and developmentTairua-Pauanui community spaces and developmentThames community spaces and developmentWhangamata community spaces and development

Through our area office network, each area delivers or supports local communities to provide a variety of indoor and outdoorspaces and facilities. These services are all governed by the local Community Board. This approach is based on the Council'srecognition that there is a diverse range of needs and wants across the district which are better addressed at a local level toenhance residents and visitors experience of the Coromandel, and range from basic essentials to leisure and recreationalpursuits.

These activities have a combination of the following services:

Airfields: Our airfields are primarily for recreational use with some commercial activity, and they are a useful resource in someemergency situations.

Cemeteries: These facilities meet the burial, remembrance and heritage needs of the community.Community centres and halls: These facilities are provided to support recreation, social and cultural needs of the community.Harbour facilities: These facilities are provided primarily to support a valued part of the Coromandel lifestyle for both residentsand visitors; commercial activity is supported at some facilities.

Libraries: Library facilities and programmes are provided to support the cultural and education needs of our communities.Parks and reserves: This service is provided to ensure there is access to a variety of parks, reserves and playgrounds which(for the most part) can be used for recreation and leisure.

Public conveniences: Public toilets, changing facilities and showers are provided in high demand areas throughout the district,for the convenience and public health of visitors and residents.

Swimming pools: These facilities are provided for recreational purposes, and to support water safety education and learn toswim programmes for the benefit of the community.


Coromandel-Colville community spaces and developmentCoromandel-Colville community spaces and development - 2016/17 performance results



Level of service: Council provides cemeteries that are tidy and well maintained spaces

Buffalo Cemetery audited8 times with 2 litter fails

80%Not achieved≥85%2016/17Percentage of cemeteriesmaintained to mowingand litter standards 92%Achieved≥85%2015/16 and Colville Cemetery

was audited twice with nofails.

Ten requests received100%Achieved≥90%2016/17Percentage of cemeteryinterment requestsresponded to ≤1 day 100%Achieved≥90%2015/16

100%Achieved100%2014/15

100%Achieved100%2013/14

Level of service: The Council's public toilets are clean and safe

Six out of seven requestsresolved within timeframe

86%Achieved≥85%2016/17Percentage of urgentcustomer enquiriesresolved within 48 hours 100%Achieved≥85%*2015/16

Level of service: Council provides harbour facilities in Coromandel and Port Charles that are safe to use

Coromandel wharf - 3Hannafords - 2Port Charles - 3Sugarloaf - 3 **

100%Achieved≥85%2016/17Wharves are assessed insatisfactory condition(condition grades 1, 2 or3)

100%Achieved≥85%2015/16

Level of service: To provide parks and reserves that are tidy and well maintained spaces

23 out of 24 enquirieswere resolved within 24hours

95%Achieved≥85%2016/17Percentage of parks andreserves relatedcustomer urgent 75%Not achieved≥85%*2015/16enquiries resolved within24 hours

Level of service: To provide playgrounds which are fit for purpose and safe

48 audits wereundertaken (5

100%Achieved≥85%2016/17Percentage of playgroundassets complying withsafety standards 100%Achieved≥85%2015/16 playgorunds audited once

a month). All achievedsafety standards.

*Previously reported district-wide** The scale is as follows: 1 - Excellent, 2 - Good, 3 - Average, 4 - Poor 5 - Very poor.To successfully meet the target Council must have no assets at a grade of 4 or 5



Comment

2017AP budget

($000)

2017Actual($000)

Project

Stage one of this project to resurface existing multipurpose courtsat the Coromandel Area School has been completed. Stage twoto construct a new court on Coromandel Area School landadjacent to the school has been deferred and will be consideredas part of the 2018/2019 work programme.

473110CoromandelSportsville


Mercury Bay community spaces and developmentMercury Bay community spaces and development - 2016/17 performance results




Ferry Landing Cemeterywas audited 12 times with

86%Achieved≥85%2016/17Percentage of cemeteriesmaintained to mowingand litter standards 100%Achieved≥85%2015/16 2 fails for mowing. The

new cemetery wasaudited twice with nofails.

16 requests wereresponded to withintimeframe.

100%Achieved≥90%2016/17Percentage of cemeteryinterment requestsresponded to ≤1 day 89%Not achieved≥90%2015/16

100%Achieved100%*2014/15

100%Achieved100%*2013/14

Level of service: Whitianga community centre is available and utilised for community activities

The Community centreswere available for 4,586

48%Achieved≥40%2016/17Percentage of actualhours community centres

33%Not achieved≥40%2015/16 hours and booked for2,221 hours.

are used compared tototal available time

42%Achieved≥36%2014/15

42%Achieved≥36%2013/14


23 out of 24 urgentrequests were resolvedwithin timeframe

95%Achieved≥85%2016/17Percentage of urgentcustomer enquiriesresolved within 48 hours 94%Achieved≥85%2015/16

Level of service: Council provides harbour facilities that are safe to use

The Whitianga Wharfstructure is assessed as

AchievedAchievedAchieved2016/17Wharves are assessed insatisfactory condition

Not achievedNot achievedAchieved2015/16 being in grade 2/3(condition grades 1, 2 or3) condition, the pontoon

has been assessed asbeing in grade 3condition. Ferry Landingis in grade 1 condition **

Level of service: A choice of new materials and current information is available throughout the year

The population used forMercury Bay was 4,368,

337 items per1,000 localresidents

Achieved≥300 itemsper 1,000local

residents

2016/17Number of new items per1,000 local residents

being the urbanpopulation of Whitianga.Total items added tocollection 1,484.270 items per

1,000 localresidents

Not achieved≥300 items per1,000 localresidents

2015/16

365Achieved300 to 3302014/15

448Achieved300 to 3302013/14




Library membershiprepresents 67% of the

4,823AchievedMaintain orincrease

2016/17The number of activelibrary users

Mercury Bay CommunityBoard area.

2013/14baseline

(3,988 users)


2015/16

2013/14baseline

(3,988 users)


38 out of 42 enquirieswere resolved within 24hours

90%Achieved≥85%2016/17Percentage of parks andreserves relatedcustomer urgent 79%Not achieved≥85%2015/16enquiries resolved within24 hours


There are 13 playgroundsin Mercury Bay and they

98%Achieved≥85%2016/17Percentage of playgroundassets complying withsafety standards 100%Achieved≥85%2015/16 are inspected eachmonth

- so 13 playgroundsinspected 12 times a yearwith three fails.



Comment

2017AP budget

($000)

2017Actual($000)

Project

Stage two construction was 95% complete by year end. The budgetwas revised up to $484,885 during the year to include the remainingunspent budget from the previous year. This year's unspent budget407395

Mercury Baycemetery stage 2

has been carried forward to complete the entranceway gate, fencesand signage in the 2017/2018 financial year. Total costs over thepast two financial years on this project are $452,948.

This project was initiated in the 2014/2015 financial year. Work hasnot progressed as planned due to delays in planning andconsultation work. The remaining budget has been carried forwardto the 2017/2018 financial year. Total costs over the past threefinancial years on this project are $191,547.

63539

Whitianga boatramps

The budget for this project was revised to $716,131 to include theremaining unspent budget from the previous financial year andadditional budget for exterior artworks. The start date for618679

Hot Water Beachtoilet upgrade

construction was delayed to accommodate the extended touristseason. The project was 90% complete at year end and the


Comment

2017AP budget

($000)

2017Actual($000)

Project

remaining budget has been carried forward to the 2017/2018financial year to complete. Total costs over the past two financialyears on this project are $697,411.

Budget for this project was bought forward from the 2020/2021financial year revising the 2016/2017 budget to $571,607 to enablethe immediate provision of 194 car parks. Project work was 98%complete at year end with a total project cost over the past twofinancial years of $604,625.

414559

Hahei village carpark (formerlyHahei park andride)


Tairua-Pauanui community spaces and developmentTairua-Pauanui community spaces and development - 2016/17 performance results



Level of service: Pauanui airfield is safe for small aircraft

The CAA inspection cycleof non-certificated

100%AchievedAchieved2016/17Civil Aviation Authority(CAA) safety

100%AchievedAchieved2015/16 aerodromes at PauanuiBeach (NZUN) is set at

requirements areachieved

Not availableNot measured100%compliance

2014/15 between 18 months and36 months. The CAAaccreditation was

100%Achieved100%compliance

2013/14 achieved on 3 March2016. This inspectioncycle is in line with othernon-certificatedaerodromes in NewZealand. Bi-monthlyvisual inspections for theintervening monthsbetween the 3-yearlyCAA inspection arecarried out and anyissues identified in theinspection reports haveeither been remedied,mitigated or are currentlyunder action.


1 Cemetery audited 12times no fails.

100%Achieved≥85%2016/17Percentage of cemeteriesmaintained to mowingand litter standards 100%Achieved≥85%2015/16

Four requests werereceived.

100%Achieved≥90%2016/17Percentage of cemeteryinterment requestsresponded to ≤1 day 80%Not achieved≥90%2015/16

100%Achieved*100%2014/15

100%Achieved*100%2013/14

Level of service: To provide or support community centres and halls in proportionate/suitable for the communitiesthey serve

Pauanui Hub is still new.An increase in usage is

6%Not achieved≥40%2016/17Percentage of actualhours community centres

14%Not achieved≥40%2015/16 anticipated in the nextfinancial year.



6 'Requests for Service'were raised and allresolved within 48 hours.

100%Achieved≥85%2016/17Percentage of urgentcustomer enquiriesresolved within 48 hours 85%Not achieved≥85%2015/16


Paku Jetty - 2Pauanui Jetty - 2**

AchievedAchievedAchieved2016/17Wharves are assessed insatisfactory condition




AchievedAchievedAchieved2015/16(condition grades 1, 2 or3)


A good range of newmaterial has been added

1078 itemsper 1,000

Achieved≥300 itemsper 1,000


while remaining withinbudget.

localresidents

localresidents

303 items per1,000 localresidents

Achieved≥300 items per1,000 localresidents

2015/16

328Achieved300 to 3302014/15

432Achieved300 to 3302013/14

Following removal ofinactive users (those who



have not used their library2013/14card in 2 years)baseline

(1,373 users) membership hasdecreased from last year


2015/16 but is still almost 70% ofthe Tairua/PauanuiCommunity Board area.2013/14

baseline(1,373 users)


26 out of 37 urgentenquiries resolved within24 hours

70%Not achieved≥85%2016/17Percentage of parks andreserves related customerurgent enquiries resolvedwithin 24 hours

67%Not achieved≥85%2015/16


There are 12 playgroundsin Pauanui and 5 in

98%Achieved≥85%2016/17Percentage of playgroundassets complying withsafety standards 100%Achieved≥85%2015/16 Tairua that get assessed

monthly - so 17playgrounds assessed 12times per year. Total of120 aduits with 3 failedresults.




Comment

2017AP budget

($000)

2017Actual($000)

Project

The project to enhance the Mary Beach wharf and boatramp in Tairua was 97% complete at year end. Theremaining budget was carried forward into the 2017/2018year to complete the project. The total cost for this projectover the past two financial years is $1,355,570.

1,2661,169Tairua Mary Beachwharf and boat ramp


Thames community spaces and developmentThames community spaces and development - 2016/17 performance results



Level of service: Thames airfield is safe for small aircraft

The Civil AviationAuthority (CAA) inspects

Not availableNotmeasuredAchieved2016/17Civil Aviation Authority(CAA) safety

AchievedAchievedAchieved2015/16 the Thames airfield everythree years. The last CAA

requirements areachieved

Not availableNot measured100%compliance

2014/15 inspection wasundertaken on 13 March

with CAA 2016.Monthly inspectionssafety

requirementsare conducted by Councilstaff in the interveningmonths and any identified

100%Achieved100%compliance

2013/14 issues are rectified at thetime.

with CAAsafety

requirements


20 audits wereundertaken. No failedresults.

100%Achieved≥85%2016/17Percentage of cemeteriesmaintained to mowingand litter standards 92%Achieved≥85%2015/16

86 total intermentrequests were received

97%Achieved≥90%2016/17Percentage of cemeteryinterment requestsresponded to ≤1 day 94%Achieved≥90%2015/16 with 84 responded to

within one day.100%Achieved*100%2014/15

100%Achieved*100%2013/14

Level of service: Thames Civic Centre is available and utilised for community activities

It is expected that oncethe newmanagement and

48%Achieved40%2016/17Percentage of actualhours community centres

45%Achieved40%2015/16 promotion contract is inplace, with KPI's around


35%Not achieved37%2014/15 the promotion of thevenue, that the actual

51%Achieved37%2013/14 hours booked percentagewill increase.


36 out of 38 requestswere completed withintimeframe.

95%Achieved≥85%2016/17Percentage of urgentcustomer enquiriesresolved within 48 hours 96%Achieved≥85%2015/16


Condition assessmentswere carried out in March

ThameswharfGrade 4**

Not achievedAchieved2016/17Wharves are assessed insatisfactory condition

2017 that identified that(condition grades 1, 2 or3) AchievedAchievedAchieved2015/16 structural maintenance is

required.





The population used forThames Library was

314 items per1,000

residents

Achieved≥300 itemsper 1,000local

residents


10,044. Total items addedto collection 3,159.

300 items per1,000

residents

Achieved≥300 items per1,000 localresidents

2015/16

320Achieved300 to 3302014/15

349Achieved300 to 3302013/14

The 2015/16 resultincluded inactive users



that had not been2013/14removed before year end.baseline

(6,193 users) This review will happenmonthly from now on.


2015/16 Membership is around89% of the Thames urban

2013/14 area and 67% of theCommunity Board area.baseline

(6,193 users)


57 out of 65 urgentenquiries were resolvedwithin 24 hours.

87%Achieved≥85%2016/17Percentage of parks andreserves related customerurgent enquiries resolvedwithin 24 hours



There are 7 playgroundsthat get assessed each

92%Achieved≥85%2016/17Percentage of playgroundassets complying withsafety standards 100%Achieved≥85%2015/16 month - so 7 playgrounds

inspected 12 times a yearwith 7 fail results.

Level of service: Council provides a safe year round swimming pool

The Thames CentennialPool has achieved

AchievedAchievedAchieved2016/17Thames Pool meetsPoolSafe accreditationstandards AchievedAchievedAchieved2015/16 Poolsafe accreditation in

April 2017 with theAchievedAchievedAchieved2014/15 current certification

expiring in April 2018.AchievedAchievedAchieved2013/14 The facility has

consistently met theaccreditation standardssince 2011.




Comment

2017AP budget

($000)

2017Actual($000)

Project

This is a multi-year project to construct a community indoor sportsfacility at Thames High School. The budget was revised during theyear to $4,847,563 to cover contract variations and additional costs

3,8934,405Thames indoorsports facility

associated with geotechnical and foundation work. The remainingbudget has been carried forward into the 2017/2018 financial yearto complete the project. The project is expected to be completed bythe end of this calendar year.


Whangamata community spaces and developmentWhangamata community spaces and development - 2016/17 performance results




Whangamata cemeteryaudited 12 times. Old

100%Achieved≥85%2016/17Percentage of cemeteriesmaintained to mowingand litter standards 100%Achieved≥85%2015/16 cemetery audited once -

no fails.

14 requests wereresponded to withintimeframe.

100%Achieved≥90%2016/17Percentage of cemeteryinterment requestsresponded to ≤1 day 86%Achieved≥90%2015/16

100%Achieved*100%2014/15

100%Achieved*100%2013/14

Level of service: To provide or support community centres and halls in proportionate/suitable for the communitiesthey serve

Booked for 2,116 hoursout of 5,110 hoursavailable

41%Achieved≥40%2016/17Percentage of actualhours community centresare used compared tototal available time

45%Achieved≥40%2015/16


53%Achieved≥47%2013/14


17 out of 21 requestswere resolved withintimeframe.

81%Not achieved≥85%2016/17Percentage of urgentcustomer enquiriesresolved within 48 hours 86%Achieved≥85%2015/16


Whangamata WharfAccess deck and 'old'

Not AchievedNot achievedAchieved2016/17Wharves are assessed insatisfactory condition

AchievedAchievedAchieved2015/16 portion of the main deck(condition grades 1, 2 or3) are in poor condition -

grade 4. The balance ofthe main wharf deck builtin 1995 is in goodcondition - grade 2. Newaluminium ramp to thepontoon installed in 2010is in good condition -grade 2. The concretepontoon is in averagecondition - grade 3.Whangamata Boat Rampand Jetty are recentlyinstalled so in excellentcondition - grade 1.


42 out of 55 urgentenquiries were resolved

76%Not achieved≥85%2016/17Percentage of parks andreserves related

77%Not achieved≥85%2015/16 within 24 hours. Therecustomer urgentwill be a review of the




escalation process toensure the timeframesare met in future.

enquiries resolved within24 hours


There are 2 in Onemanaand 8 in Whangamat that

98%Achieved≥85%2016/17Percentage of playgroundassets complying withsafety standards 100%Achieved≥85%2015/16 get assessed each

month. 10 playgroundsinspected 12 times a yearwith 1 failed audit.



Economic development activity groupThis activity group includes our economic development activity. Through the implementation of the Council's events andeconomic development strategies our economic development activity provides:

Advocacy for a business friendly environment for existing business on the CoromandelSector and business growth and developmentInvestment attraction and facilitationTourism destination management, marketing and visitor servicesAttraction and sponsorship of major eventsDevelopment of key economic development related infrastructureA compelling economic and investment brand for the Thames-Coromandel

Our Economic development activity is responsible for bringing a consistent and integrated district-wide approach to economicdevelopment, tourism and major events. This is to help improve the Coromandel's economic performance and to support andenhance the ability of the district to compete nationally.

Economic development - 2016/17 performance results



Level of service: Implement strategies and programmes to support and facilitate sustainable economic growth onthe Coromandel

*Continued work with EDManager and Partnersprogressing well.*New ED Strategydeveloping with focus on

75%Achieved75% of theeconomic

development2016/17 workprogramme*achieved

2016/17Proportion of Priority OneEconomic DevelopmentStrategy WorkProgramme achieved(expressed as a numberor percentage dependent joining the dots and beingon scale and detail ofprogramme)

a business friendlycouncil.

79%AchievedTo meet 75%of the 2015/16

2015/16

EconomicDevelopmentActivity workprogramme**

*Economic development 2016/17 work programme (% achieved for the quarter)

Contract management of Destination Coromandel and ISITE service level agreements - 100%Deliver the 2016/17 major event sponsorship funding programme - 100%Contract management of major events fund and work with event managers to develop sustainable events - 100%Establish permanent event development function via Destination Coromandel - 100%Establish major exporter and employers forum - 10%Work with aquaculture, forestry and manufacturing industries on boosting export potentials - 60%Partnership programme for better broadband - 100%Facilitate electric vehicle charging stations - 80%Work with Auckland Tourism, Events and Economic Development (ATEED) on food trail programme - 100%Deliver the 2016/17 Summertimes magazine and marketing programme - 100%Facilitate business friendly initiatives at Thames-Coromandel District Council - 75%Establish permanent business broker role - 100%Deliver a "Blue Highway Programme" to promote Auckland - Coromandel ferry - 25%Invest in Infometrics economic data profile - 100%Deliver 2016/17 Project Kopu work programme - 50 %Develop strategic relationship with Callaghan Institute/Waikato Innovation Park - 100%Review the Economic Development and Events Strategies - 30%Work with the creative industries sector on a Coromandel arts trail - 50%Deliver 2016/17 Sugarloaf project milestones - 55%


Deliver 2016-17 Coromandel Walks milestones - 55%Deliver stage 2 of the Hauraki Rail Trail - Kopu to Kaiaua (K2K) - 80%Deliver 2015/16 WW1 Forest Programme - stage 2 - 100%

**The 2015/16 target is to meet 75% of the following work programme:

Contract management of Destination Coromandel and ISITE SLAsDeliver the 2015/16 Major Event Sponsorship Funding ProgrammeDeliver the 2015/16 Summertimes Magazine and marketing programmeDeliver joint venture food marketing programme with ATEEDDeliver 2015/16 WW1 Forest programmeDeliver 2015/16 Project Kopu work programmeInvest in improving Broadband services on the Coromandel and compete for Government fundingFormalise the business broker services at TCDCEstablish a property development investment package/incentive programmeDevelop a Better Business Case (Treasury model) to identify potential investment opportunities with Goldfields mallownersImplement a youth employment initiativeDeliver a Coromandel Arts StrategyDeliver a heritage park concept and action planAdopt a Coromandel Harbour StrategyDeliver stage 1 of the Coromandel WalksDeliver stage 2 of the HRT (K2K)Deliver a project definition and business case for improved medical services in WhitiangaDeliver 2015/16 Sugarloaf project milestones


Comment2017 APbudget ($000)

2017 Actual($000)

Project

This multi-year project was initiated in the 2015/2016 financial yearto construct parking and roading infrastructure associated with theCoromandel Walks. Work is being progressed with the land owner,

1,356272Lees Road sealextension andcarpark

local residents and consenting requirements. Construction isexpected to begin in April 2018, with an estimated completion dateof June 2018. This will depend on the timing of the consentingrequirements.


Financial statements | Ngā Tauakī PūteaGuide to financial statementsIntroductionThe Local Government Act 2002 requires the Council to report its actual performance compared to targets published in theAnnual Plan. We report against both financial and non-financial measures. The main purpose of providing financial statementsis to enable stakeholders (residents and ratepayers, other local authorities, business community groups, Government regulatorybodies etc.) to assess our performance and make decisions regarding the Council and how it conducts its business.

This information includes the statement of comprehensive revenue and expense, the statement of financial position, thestatement of changes in equity, the statement of cash flows, and the accompanying statement of significant accounting policiesand notes to the financial statements. This information must be prepared according to generally accepted accounting practiceand recognised accounting standards.

Statement of accounting policiesThese explain the basis upon which the financial statements are prepared. They explain the methods adopted by the Councilused to measure the transactions incorporated into the financial statements above.

Statement of comprehensive revenue and expenseThe statement of revenue and expense shows all of the Council’s revenue earned and expenses incurred for the 12 monthsup to 30 June 2017. Revenue includes income received from rates and other income such as investment income, rent andfees while expenses paid includes costs such as operating costs, interest payments and depreciation.

This statement shows how total comprehensive revenue and expense is derived. Total comprehensive revenue and expenseis then added or subtracted from Council’s equity as shown in the statement of changes in equity.

Statement of changes in equityThis statement provides information about the nature of changes in Council’s equity during the year.

Statement of financial positionThe statement of financial position shows the assets and liabilities of the Council as at 30 June 2017.

Assets include cash, accounts receivable (money owed to the Council but not yet received), investments, land, buildings,operational and infrastructural assets. Current assets are amounts owed to the Council that are expected to be received withinthe next 12 months while current liabilities are the Council’s debts that are due to be paid within the next 12 months.

Investments are the Council funds held in income earning securities while property, plant and equipment are of a permanentnature and are held for the benefit of the community.

Non-current liabilities represent money owed by the Council that does not have to be paid within the next 12 months.

Statement of cash flowsThis statement covers all the inflows and outflows of cash during the year covered by the statement of comprehensive revenueand expense. The statement of cash flows identifies the sources and application of cash in respect of the Council’s operating,investing and financing activities.

Funding impact statementThe funding impact statements ("FIS") have been prepared in accordance with the Local Government (Financial Reporting andPrudence) Regulations 2014, which came into effect 17 March 2014. This is a reporting requirement unique to Local Government.The disclosures contained within and the presentation of these statements is not prepared in accordance with generallyaccepted accounting practices ("GAAP").

The purpose of these statements is to report the net cost of services for significant groups of activities ("GOA") of the Council,and are represented by the revenue that can be attributed to these activities less the costs of providing the service. They containall the funding sources for these activities and all the applications of this funding by these activities. The GOA FIS includeinternal transactions between activities such as internal overheads and charges applied and or recovered and internal borrowings.These GOA FIS are contained in "Our Services" section of this report.

The FIS is also prepared at the whole of Council level summarising the transactions contained within the GOA FIS, eliminatinginternal transactions, and adding in other transactions not reporting in the GOA statements.

These statements are based on cash transactions prepared on an accrual basis and as such do not include non cash/accountingtransactions that are included with the statement of comprehensive revenue and expense as required under GAAP. Theseitems include but are not limited to the Council's depreciation, gain and/or losses on revaluation and vested assets.


They also depart fromGAAP as funding sources are disclosed within the FIS as being either for operational or capital purposes.Income such as subsidies received for capital projects, development contributions and proceeds from the sale of assets arerecorded as capital funding sources. Under GAAP these are treated as income in the statement of comprehensive revenueand expense.

Notes to the financial statementsThese notes to the accounts provide further details of what the summarised amounts reported on in the above financialstatements are comprised of. The reference to the note is included in the financial statements ‘Notes’ column, beside the dollarvalues for the current financial year.

Statement of complianceThe Council of Thames-Coromandel District Council hereby confirms that all statutory requirements in relation to the annualreport, as outlined in the Local Government Act 2002, have been complied with.

Chief ExecutiveMayor

31 October 201731 October 2017


Statement of comprehensive revenue and expenseFor the year ended 30 June 2017

201620172017ActualActualBudget$000's$000's$000'sNotes

Revenue59,53360,90661,4343Rates revenue10,34111,19110,0613Fees and charges2,3312,1321,667Development and financial contributions5,9868,7338,6393Subsidies and grants

77156123Interest revenue6,5466,9993,7723Other revenue84,81690,11785,584Total revenue

Expenses15,38416,01316,7374Personnel costs18,62118,52319,00718Depreciation and amortisation expense2,6422,2422,6365Finance costs41,40244,06642,3186Other expenses78,05080,84580,699Total expenses

259015Share of joint venture surplus/(deficit)6,7909,2814,886Surplus/(deficit) before tax

0007Income tax expense6,7909,2814,886Surplus/(deficit) after tax

Other comprehensive revenue and expense17,65297,51327,842Gain on property, plant and equipment revaluations

1320Gain/(loss) on financial assets revaluations17,66597,51427,842Total other comprehensive revenue and expense24,455106,79532,727Total comprehensive revenue and expense

The accompanying notes form part of these financial statements. Explanations of major variances against budget are providedin note 30.


Statement of financial positionAs at 30 June 2017


AssetsCurrent assets

1,009954748Cash and cash equivalents6,7408,7177,5149Receivables

8699013Other financial assets12510218010Inventory

7,9609,0138,168Total current assetsNon-current assets

4133704509Postponed rates118127015Investments in joint ventures

Other financial assets:791791013Investments in CCOs and similar entities586099813Investments in other entities849850998Total other financial assets

5,9655,8377,47817Intangible assets2,7492,5232,93119Forestry assets

1,325,6531,432,3951,369,96216Property, plant and equipment1,335,7461,442,1021,381,819Total non-current assets1,343,7061,451,1151,389,987Total assets

LiabilitiesCurrent liabilities

13,74617,25214,01820Payables and deferred revenue1,2691,3031612Derivative financial instruments1,6441,7231,55322Employee entitlements1,3076262,68823Provisions

012,200021Borrowings17,96633,10518,274Total current liabilites

Non-current liabilities5,1383,2652,29812Derivative financial instruments20019018522Employee entitlements

5,9035,2625,73023Provisions35,00023,00047,70021Borrowings46,24231,71755,912Total non-current liabilities64,20864,82274,186Total liabilities

1,279,4981,386,2931,315,800Net assets (assets minus liabilities)

Equity377,048388,686391,29326Accumulated funds902,450997,607924,50726Reserves

1,279,4981,386,2931,315,800Total equity

The accompanying notes form part of these financial statements. Explanations of major variances against budget are providedin note 30.


Statement of changes in equityFor the year ended 30 June 2017


1,255,0431,279,4981,283,073Balance at 1 July24,455106,79532,727Total comprehensive revenue and expense for the year

1,279,4981,386,2931,315,80026Balance at 30 June

The accompanying notes form part of these financial statements. Explanations of major variances against budget are providedfor in note 30.

Statement of cash flowsFor the year ended 30 June 2017

201620172017ActualActualBudget$000's$000's$000's

Cash flows from operating activities57,81158,35861,396Receipts from rates revenue20,75723,31321,069Receipts from other revenue

7715612Interest received660Dividends received

424(203)0GST (net)(50,604)(58,614)(59,073)Payments to suppliers and employees(2,482)(2,202)(2,636)Interest paid25,98920,81420,768Net cash flow from operating activities

Cash flows from investing activities000Advance payments received

742117156Receipts from sale of property, plant and equipment(22)(13)0Advance payments made

(19,003)(21,513)(29,821)Purchase of property, plant and equipment(692)(519)(614)Purchase of intangible assets

(18,975)(21,928)(30,279)Net cash flow from investing activitiesCash flows from financing activities

25,0008,50011,528Proceeds from borrowings000Repayment of finance lease liabilities

(31,100)(8,300)(2,134)Repayment of borrowings(6,100)2009,394Net cash flow from financing activities

914(914)(118)Net increase/(decrease) in cash and cash equivalents951,009591Cash and cash equivalents at the start of the year

1,00995474Cash and cash equivalents at the end of the year


Statement of cash flows for the year ended 30 June 2017Reconciliation of surplus/(deficit) after tax to net cash flow from operating activities

20162017ActualActual$000's$000's6,7909,281Surplus/(deficit) after tax

Add/(less) non-cash items(5,717)(3,682)Vested assets

692647Amortisation17,92917,876Depreciation

182226(Gains)/losses in fair value of forestry assets2,188(1,839)Net (gains)/losses on interest rate swaps

5523Impairment of spare parts15,32913,251Total non-cash items

Add/(less) movements in working capital items1,68580Increase/(decrease) in payables(1,228)(1,181)Increase/(decrease) in provisions

10769Increase/(decrease) in employee entitlements864(2,074)(Increase)/decrease in receivables

1,428(3,106)Net movement in working capital itemsAdd/(less) items classified as investing activities

2,4671,397(Gains)/losses on sale of property, plant and equipment(25)(9)Share of joint venture's surplus

2,4421,388Total items classified as investing activities25,98920,814Net cash inflow/(outflow) from operating activities


Notes to the financial statementsNote 1 - Statement of accounting policiesREPORTING ENTITYThames-Coromandel District Council (Council) is a territorial local authority established under the Local Government Act 2002(LGA) and is domiciled and operates in New Zealand. The relevant legislation governing the Council's operations includes theLGA and the Local Government (Rating) Act 2002.

Council's 40% interest in a jointly controlled entity called the Thames Valley Emergency Operating Area (TVEOA) is equityaccounted into the group financial statements.

The Council provides local infrastructure, local public services and performs regulatory functions to the community. The Councildoes not operate to make a financial return.

The Council has designated itself as a public benefit entity (PBE) for financial reporting purposes.

The financial statements of the Council are for the year ended 30 June 2017. The financial statements were authorised forissue by Council on 31 October 2017.

BASIS OF PREPARATIONThe financial statements have been prepared on the going concern basis, and the accounting policies have been appliedconsistently throughout the year.

Statement of complianceThe financial statements of the Council have been prepared in accordance with the requirements of the LGA and the LocalGovernment (Financial Reporting and Prudence) Regulations 2014 (LG(FRP)R), which include the requirement to comply withgenerally accepted accounting practice in New Zealand (NZ GAAP).

The financial statements have been prepared in accordance with and comply with PBE standards.

Presentation currency and roundingThe financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars($000), other than the remuneration and the severance payment disclosures in note 4, and the related party transactiondisclosures in Note 27. The remuneration, severance payment, and related party transaction disclosures are rounded to thenearest dollar.

Standards issued that are not yet effective that have been early adoptedA standard issued and not yet effective that has been adopted early by Council is as follows:

Impairment of Revalued AssetsIn April 2017, the XRB issued Impairment of Revalued Assets, which now scopes in revalued property, plant, and equipmentinto the impairment accounting standards. Previously, only property, plant, and equipment assets measured at cost werescoped into the impairment accounting standards.

The Council has early adopted this amendment in preparing its 30 June 2017 financial statements. From the 30 June 2017year onwards, the Council is required to assess at each reporting date whether there is any indication that an asset may beimpaired. If any indication exists, the Council is required to assess the recoverable amount of that asset and recognise animpairment loss if the recoverable amount is less than the carrying amount. The Council can therefore impair a revalued assetwithout having to revalue the entire class-of-asset to which the asset belongs.

Other changes in accounting policiesThere have been no other changes in accounting policies.

Standards issued and not yet effective, and not early adoptedStandards and amendments, issued by not yet effective that have not been early adopted, and which are relevant to the Counciland group are:

2016 Omnibus Amendments - Service concession assetsIn January 2017, the External Reporting Board (XRB) issued the 2016 Omnibus Amendments to PBE Standards, whichincorporates a range of amendments to the PBE Standards. A relevant amendment for the Council is to PBE IPSAS 32 ServiceConcession Arrangements: Grantor. This amendment requires that service concession assets be grouped with similar property,plant and equipment assets for the purpose of subsequent measurement and disclosure under PBE IPSAS 17 Property, Plantand Equipment.

2016 Omnibus Amendments to PBE Standards, issued in January 2017, requires that the amendment be applied for annualfinancial statements covering periods beginning on or after 1 January 2017.


Interests in other entitiesIn January 2017, the XRB issued new standards for interests in other entities (PBE IPSAS 34-38). These new standardsreplace the existing standards for interests in other entities (PBE IPSAS 6-8). The new standards are effective for annualperiods beginning on or after 1 January 2019, with early application permitted.

The Council plans to apply the new standards in preparing the 30 June 2020 financial statements. The Council and group hasnot yet assessed the effects of these new standards.

Financial instrumentsIn January 2017, the XRB issued PBE IFRS 9 Financial Instruments. PBE IFRS 9 replaces PBE IPSAS 29 Financial Instruments:Recognition and Measurement. PBE IFRS 9 is effective for annual periods beginning on or after 1 January 2021, with earlyapplication permitted. The main changes under PBE IFRS 9 are:

New financial asset classification requirements for determining whether an asset is measured at fair value or amortisedcost.A new impairment model for financial assets based on expected losses, which may result in the earlier recognition ofimpairment losses.Revised hedge accounting requirements to better reflect the management of risks.

The Council plans to apply this standard in preparing its 30 June 2022 financial statements. The Council and group has notyet assessed the effects of this new standard.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESSignificant accounting policies are included in the notes to which they relate.

Significant accounting policies that do not relate to a specific note are outlined below.

Foreign currency transactionsForeign currency transactions (including those for which forward foreign exchange contracts are held) are translated into NZ$(the functional currency) using the spot exchange rates at the date of the transactions. Foreign exchange gains and lossesresulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets andliabilities denominated in foreign currencies are recognised in the surplus or deficit.

Goods and services taxAll items in the financial statements are stated exclusive of GST, except for receivables and payables, which are stated on aGST-inclusive basis. Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense.

The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivablesor payables in the statement of financial position.

The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified asan operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST.

Budget figuresThe budget figures are those approved by Council in its 2016/17 annual plan. The budget figures have been prepared inaccordance with NZ GAAP, using accounting policies that are consistent with those adopted by Council for the preparation ofthese financial statements.

Critical accounting estimates and assumptionsIn preparing these financial statements, Council has made estimates and assumptions concerning the future. These estimatesand assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and arebased on historical experience and other factors, including expectations or future events that are believed to be reasonableunder the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities with the next financial year are:

Estimating the fair value of land, buildings, and infrastructural assets - see Note 16Estimating the retirement and long service leave obligations - see Note 22Estimating the landfill aftercare provision - see Note 23Estimating leaky home settlement costs - see Note 23

Critical judgements in applying accounting policiesManagement has exercised the following critical judgements in applying accounting policies:

Donated or vested land and buildings with use or return conditions – see Note 3Classification of property – see Note 16.


Note 2 - Summary revenue and expenditure for group of activities

Accounting PolicyThe cost of service for each significant activity of the Council has been derived using the cost allocation system outlinedbelow.

Direct costs are those costs directly attributable to a significant activity. Indirect costs are those that cannot be identifiedin an economically feasible manner with a specific activity.

Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities using appropriatecost drivers such as actual usage, staff numbers and floor area. There have been no changes to the cost allocationmethodology during the year.

Breakdown of summary revenue and expenditure for group of activities

201620172017ActualActualBudget$000's$000's$000s

Revenue4,3964,3555,095Representation7,7918,8138,044Planning and regulation3,2133,7193,345Protection of people and the environment13,69115,14114,419Roads and footpaths12,52014,60014,330Community spaces and development2,1572,3822,865Economic development9,2259,0998,997Water17,27216,20916,625Wastewater3,4453,2003,168Stormwater6,5867,5026,283Solidwaste80,29685,02283,172Activity revenue

Revenue not directly attributable to an activity5,7173,6821,165Revenue from vested assets

01,8391,905Gain on revaluation of interest rate swaps7400Gain on disposal of assets02320Other revenue

(1,271)(659)(658)Less internal revenue84,81690,11785,584Total revenue

Expenditure5,9305,1396,279Representation7,6279,7769,681Planning and regulation3,0023,2633,151Protection of people and the environment13,41215,27315,655Roads and footpaths10,75611,07911,611Community spaces and development2,6282,2124,200Economic development8,5388,6228,710Water13,28015,01813,115Wastewater2,8823,0153,006Stormwater6,0516,4465,947Solidwaste74,10579,84281,357Activity expenditure

Expenditure not directly attributable to an activity1822260Loss on revaluation of forestry

2,18800Loss on revaluation of interest rate swaps55230Impairment of inventory

2,5411,3970Loss on disposal of assets25000Other expenditure

(1,271)(659)(658)Less internal expenditure78,05080,82980,699Total expenditure

Each significant activity is stated gross of internal costs and revenues, and includes targeted rates attributable to activities (seeNote 3). In order to fairly reflect the total external operations for the Council in the statement of comprehensive revenue andexpense, these transactions are eliminated as shown above.


Note 3 - Revenue

Accounting policyRevenue is measured at fair value.

The specific accounting policies for significant revenue items are explained below:

Rates RevenueThe following policies for rates have been applied:

General rates, targeted rates (excluding water-by-meter), and uniform annual general charges are recognised atthe start of the financial year to which the rates resolution relates. They are recognised at the amounts due. TheCouncil considers that the effect of payment of rates by instalments is not sufficient to require discounting of ratesreceivable and subsequent recognition of interest revenue.Rates arising from late payment penalties are recognised as revenue when rates become overdue.Revenue from water-by-meter rates is recognised on an accrual basis based on usage. Unbilled usage, as a resultof unread meters at year end, is accrued on an average usage basis.Rates remissions are recognised as a reduction of rates revenue when the Council has received an applicationthat satisfies its rates remission policy.

Development and financial contributionsDevelopment and financial contributions from subdivision consents are recognised as income upon the granting of theresource consent and prior to the completion certificate being issued pursuant to Section 224c of the ResourceManagementAct 1991. Contributions from land use consents are recognised as income upon the granting of the resource consent.

Development contributions are recognised as revenue when the Council provides, or is able to provide, the service forwhich the contribution was charged. Otherwise, development and financial contributions are recognised as liabilities untilthe Council provides, or is able to provide, the service.

New Zealand Transport Agency roading subsidiesThe Council receives funding assistance from the New Zealand Transport Agency, which subsidises part of the costs ofmaintenance and capital expenditure on the local roading infrastructure. The subsidies are recognised as revenue uponentitlement, as conditions pertaining to eligible expenditure have been fulfilled.

Other grants receivedOther grants are recognised as revenue when they become receivable unless there is an obligation in substance to returnthe funds if the conditions of the grant are not met. If there is such an obligation, the grants are initially recorded as grantsreceived in advance and recognised as revenue when conditions of the grants are satisfied.

Building and resource consent revenueFees and charges for building and resource consent services are recognised on a percentage completion basis withreference to the recoverable costs incurred at balance date.

Entrance feesEntrance fees are fees charged to users of the Council's local facilities, such as the pool. Revenue from entrance feesis recognised upon entry to such facilities.

Landfill feesFees from disposing of waste at the Council's landfills are recognised as waste is disposed by users.

Provision of commercially based servicesRevenue derived through the provision of services to third parties in a commerical manner is recognised in proportion tothe stage of completion at balance date. Generally, this is determined by the proportion of costs incurred to date bearingto the estimated total costs of providing the service.

Sale of goodsRevenue from sales of goods is recognised when a product is sold to the customer.

Infringement fees and finesInfringement fees and fines mostly relate to traffic and parking infringements and are recognised when the infringementnotice is issued. The fair value of this revenue is determined based on the probability of collecting fines, which is estimatedby considering the collection history of fines over the preceding 2-year period.


Accounting policy (continued)Vested or donated physical assetsFor assets received for no or nominal consideration, the asset is recognised at its fair value when the Council obtainscontrol of the asset. The fair value of the asset is recognised as revenue, unless there is a use or return condition attachedto the asset.

The fair value of vested or donated assets is usually determined by reference to the cost of constructing the asset. Forassets received from property developments, the fair value is based on the unit rate for each specific component vested.These unit rates are calculated by Council and peer reviewed on an annual basis by a suitably qualified external valueron an annual basis. Should no unit rate exist for a specific type of asset at the time Council obtains control of the asset,then the value is determined by using the construction price information provided by the property developer.

For long-lived assets that must be used for a specific use (for example, land must be used as a recreation reserve), theCouncil immediately recognises the fair value of the asset as revenue. A liability is recognised only if the Council expectsthat it will need to return or pass the asset to another party.

Donated and bequeathed financial assetsDonated and bequeathed financial assets are recognised as revenue unless there are substantive use or return conditions.A liability is recorded if there are substantive use or return conditions and the liability is released to revenue as theconditions are met (for example, the funds are spent for the nominated purpose).

Interest and dividendsInterest revenue is recognised using the effective interest method. Interest revenue on an impaired financial asset isrecognised using the original effective interest rate.

Dividends are recognised when the right to receive payment has been established.

Critical judgements in applying accounting policiesAccounting for donated or vested land and buildings with use or return conditionsThe Council has received land and buildings from non-exchange transactions that contain use or return conditions. Ifrevenue is not recognised immediately for such assets when received, there is the possibility that a liability would berecognised in perpetuity and no revenue would ever be recognised for the asset received. The Council considers thatan acceptable and more appropriate accounting treatment under PBE IPSAS 23 is to recognised the revenue immediatelyfor such transfers and a liability is not recognised until such time as it is expected that the condition will be breached.

(i) Breakdown of rates and further information

20162017ActualActual$000's$000's4,8745,274General rates9,13510,082Uniform annual general charge

Targeted rates attributable to activities:1,4731,452- Targeted rates for metered water supply43,89043,877- Other targeted rates

769898Rates penalties(607)(676)Rates remissions

59,53360,906Total rates

The following rating base information is disclosed based on the rating base information at the end of the preceding financialyear:

2016As at 30 June27,032Number of rating units

14,769,628,750Total capital values of rating units9,491,501,400Total land value of rating units


Council is required by the LGFA Guarantee and Indemnity Deed to disclose in its financial statements (or notes) its annualrates income. That Deed defines annual rates income as an amount equal to the total revenue from any funding mechanismauthorised by the Local Government (Rating Act) 2002 together with any revenue received by Council from other local authoritiesfor services provided by that Council for which those other Local Authorities rate. The annual rates income of Council for theyear ended 30 June 2017 for the purposes of the LGFA Guarantee and Indemnity Deed is shown below.

20162017ActualActual$000's$000's60,14161,582Rates60,14161,582Total gross annual rates income

(ii) Breakdown of subsidies and grants

20162017ActualActual$000's$000's5,2076,502New Zealand Transport Agency roading subsidies

66New Zealand Defence Force cemetery subsidies390Other subsidies7352,224Other grants

5,9868,733Total subsidies and grants

(iii) Breakdown of fees and charges

20162017ActualActual$000's$000's4,0734,678Building and resource consent charges2,6873,005Solid waste revenue416383Land information memoranda sales

3,1653,125Other fees and charges10,34111,191Total fees and charges

(iv) Breakdown of interest revenue

20162017ActualActual$000's$000's

Interest revenue77156Term deposits00Discount unwind on provisions77156Total interest revenue

(v) Breakdown of other revenue

20162017ActualActual$000's$000's405428Petrol tax286203Traffic and parking infringements5443Court fees and fines

5,7173,682Vested land and infrastructure from property development01,839Gain on changes in fair value of derivative financial instruments740Property, plant and equipment gains on disposal66Dividend revenue4798Other

6,5466,999Total other revenue

Operating leases as a lessorThe Council leases some properties held for future strategic purposes under operating leases. Lease terms range anywherefrom 12 months to 21 years (with lease review every 3 years). The future aggregate minimum lease payments is to be collectedunder non-canellable operating leases are as follows:



Operating leases as lessor685732Not later than one year

1,9021,692Later than one year and not later than five years2,3662,085Later than five years4,9534,510Total non-cancellable operating leases

No contingent rents have been recognised during the year.

Note 4 - Personnel costs

Accounting policySuperannuation schemesDefined contribution schemes

Employer contributions to KiwiSaver are accounted for as defined contribution superannuation schemes and are expensedin the surplus or deficit as incurred.

Defined benefit schemes

The Council makes employer contributions to the Defined Benefit Plan Contributors Scheme (the scheme), which ismanaged by the Board of Trustees of the National Provident Fund. The scheme is a multi-employer defined benefitscheme.

Insufficient information is available to use defined benefit plan accounting, as it is not possible to determine from theterms of the scheme the extent to which the scheme's surplus or deficit will affect future contributions by individualemployers, as there is no prescribed bases for allocation. The scheme is therefore accounted for as a defined contributionscheme.

Breakdown of personnel costs and further information

20162017ActualActual$000's$000's14,90215,548Salaries and wages

375396Employer contributions to defined contribution plans10769Increase/(decrease) in employee entitlements

15,38416,013Total personnel costs

Chief Executive remunerationThe total remuneration (including any non-financial benefits) paid or payable for the year to the Chief Executive was $345,004(2016: $351,659).

Council employee remuneration by bandTotal remuneration includes any non-financial benefits provided to employees.


Total annual remuneration by band for employees as at 30 June 201710094< $60,0005658$60,000-$79,9993435$80,000-$99,9991213$100,000-$119,99966$120,000-$139,99966$140,000-$179,99967$180,000-$359,999

220219Total employees


At balance date, the Council employed 172 (2016: 166) full-time employees, with the balance of staff representing 27 (2016:32) full-time equivalent employees. A full-time employee is determined on the basis of a 40-hour working week.

Elected representatives' remunerationElected representatives received the following remuneration:


Elected representatives received the following remuneration:Previous Council

11635Mayor Glenn Leach4418Deputy Mayor Peter French3712Councillor Tony Brljevich309Councillor Diane Connors3916Councillor Tony Fox309Councillor Sandra Goudie3712Councillor Murray McLean JP309Councillor Jack Wells309Councillor Jan Bartley

Present Council077Mayor Sandra Goudie033Deputy Mayor Tony Brljevich032Councillor Tony Fox029Councillor Murray McLean JP022Councillor Jan Bartley025Councillor Rex Simpson025Councillor Sally Christie025Councillor Strat Peters029Councillor Terry Walker

393426Total elected representatives remuneration

Severance paymentsFor the year ended 30 June 2017, the Council made 1 (2016: nil) severance payment to an employee totalling $5,000 (2016:$nil).

Note 5 - Finance costs

Accounting policyBorrowing costs are recognised as an expense in the financial year in which they are incurred.

Breakdown of finance costs


Interest expense2,4822,202Interest on borrowings16040Discount unwind on provisions

2,6422,242Net finance costs


Note 6 - Other expenses

Accounting policyGrant expenditureThe Council's grants awarded have no substantive conditions attached.

Non-discretionary grants are those grants that are awarded if the grant application meets the specified criteria and arerecognised as expenditure when an application that meets the specified criteria for the grant has been received.

Discretionary grants are those grants where the Council has no obligation to award on receipt of the grant applicationand are recognised as expenditure when approved by the Council and the approval has been communicated to theapplicant.

Operating leasesAn operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of anasset. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the leaseterm.

Breakdown of other expenses and further information


Fees to auditors:137141fees to Audit New Zealand for audit of financial statements04- fees to Audit New Zealand for other services

403319General grants4849Operating lease expense453469Impairment of receivables00Impairment of property intended for sale5523Impairment of spare parts for obsolescence

2,5411,397Property, plant and equipment and intangible assets losses on disposal2,1880Derivative financial instruments revaluation losses182226Forestry asset revaluation losses

35,39541,438Other operating expenses41,40244,066Total other expenses

Operating leases as lesseeThe Council leases property, plant and equipment in the normal course of business. The lease has a non-cancellable term of12 months. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:


66Not later than one year2119Later than one year and not later than five years1612Later than five years4237Total non-cancellable operating leases

The total minimum future sublease payments expected to be received under non-cancellable subleases at balance date is $nil(2016: $nil). The Council cannot assign or sublet the property without prior written consent of the lessor.

The lease can be renewed at the Council's option, with rents set by reference to current market rates for items of equivalentage and condition. The Council does not have the option to purchase the asset at the end of the lease term.

There are no restrictions placed on the Council by any of the leasing arrangements.


Note 7 - Tax

Accounting policyIncome tax expense includes components relating to both current and deferred tax. The Council is exempt from incometax with the exception of income derived from wharf operations. Historically, the deductible operating expenditure hasoffset any operating revenue that is subject to income tax.

Current tax is the amount of income tax payable based on the taxable profit for the current year, plus any adjustmentsto income tax payable in respect of prior years. Current tax is calculated using tax rates (and tax laws) that have beenenacted or substantively enacted at balance date.

Deferred tax is the amount of income tax payable or recoverable in future periods in respect of temporary differencesand unused tax losses. Temporary differences are differences between the carrying amount of the assets and liabilitiesin the statement of financial position and the corresponding tax bases used in the computation of taxable profit.

Deferred tax is measured at the tax rates that are expected to apply when the asset is realised or the liability is settled,based on tax rates (and tax laws) that have been enacted or substantively enacted at balance date. The measurementof deferred tax reflects the tax consequences that would follow from the manner in which the entity expects to recoveror settle the carrying amount of its assets and liabilities.

Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognisedto the extent that it is probable that taxable profits will be available against which the deductible temporary differencesor losses can be utilised.

Deferred tax is not recognised if the temporary difference arises from the initial recognition of goodwill or from the initialrecognition of an asset or liability in a transaction that is not a business combination, and at the time of the transaction,affects neither accounting profit nor taxable profit.

Current and deferred tax is recognised against the surplus or deficit for the period, except to the extent that it relates toa business combination, or to transactions recognised in other comprehensive revenue and expense or directly in equity.

Breakdown of taxes and further information


Components of tax expense00Current tax expense00Deferred tax expense00Tax expense

Relationship between tax expense and accounting surplus6,7909,281Net surplus /(deficit) before tax1,9012,599Tax at 28%

Plus /(less) tax effect of:(2,024)(2,415)Non-taxable revenue

123(184)Deferred tax adjustment00Tax expense

TotalTax lossesOther

provisionsEmployee

entitlementsPPE$000's$000's$000's$000's$000's

Deferred tax asset (liability)025200(252)Balance at 30 June 2015012100(121)Charged to surplus or deficit0200(2)Charged to other comprehensive revenue

and expense037500(375)Balance at 30 June 20160(257)00257Charged to surplus or deficit07300(73)Charged to other comprehensive revenue

and expense019100(191)Balance at 30 June 2017


Other tax-related disclosuresA deferred tax asset has not been recognised in relation to tax losses of $4,224,759 (2016: $3,263,240). Based on the extentto which it is probable that taxable profits will be available against which to deduct tax losses.

Note 8 - Cash and cash equivalents

Accounting policyCash and cash equivalents includes cash on hand, deposits held at call with banks, and other short-term highly liquidinvestments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown withinborrowings in current liabilities in the statement of financial position.

Breakdown of cash and cash equivalents and further information

20162017ActualActual$000's$000's99177Cash at bank and on hand1818Domain committee current accounts

1,00995Total cash and cash equivalents

The carrying value of cash at bank with maturities less than three months approximates their fair value. Cash and cashequivalents include that stated above for the purposes of the statement of cashflows.

Note 9 - Receivables

Accounting policyShort-term receivables are recorded at their face value, less any provision for impairment for noncollectability.

A receivable is considered to be noncollectable when there is evidence that the amount due will not be fully collected.The amount that is noncollectable is the difference between the amount due and the present value of the amount expectedto be collected.

Breakdown of receivables and further information

20162017ActualActual$000's$000's5,8006,355Rates receivables

Other receivables:00Related party receivables

3,6955,215Other9,49611,570Receivables prior to impairment(2,342)(2,483)Less provision for impairment7,1539,087Total receivables

Less non-current portion(413)(370)Postponed rates(413)(370)Total non-current portion6,7408,717Current portion receivables

Total receivables comprise:

6,8178,990Receivables from non-exchange transactions - this includes outstanding amounts for rates,grants, infringements, and fees and charges that are partly subsidised by rates

33697Receivables from exchange transactions - this includes outstanding amounts for fees andcharges that have not been subsidised by rates


Fair valueReceivables are generally short-term and non-interest bearing. Therefore, the carrying value of receivables approximates theirfair value.

The face value of postponed rates is $370,084 (2016: $413,104). Fair value has not been determined by using discountedcash flows.

Interest was charged at a rate of 6.71% on postponed rates for the 2016/2017 year (2016: 7.75%). Future interest rates arenotified annually in the Long-Term Plan or Annual Plan.

Postponed rates are secured by statutory land charges over the rating units on which rates have been postponed.

ImpairmentThe Council does not provide for any impairment on rates receivable, except on Maori Freehold Land as it has various powersunder the Local Government (Rating) Act 2002 to recover any outstanding debts.

These powers allow the Council to commence legal proceedings to recover any rates that remain unpaid four months after thedue date for payment. If payment has not been made within three months of the Court’s judgement, then the Council can applyto the Registrar of the High Court to have the judgement enforced by sale or lease of the rating unit.

Ratepayers can apply for payment plan options in special circumstances. Where such repayment plans are in place, debts arediscounted to their net present value of future payments if the impact of discounting is material.

The carrying amount of receivables that would otherwise be past due or impaired and whose terms have been renegotiated is$3,281 (2016: $9,019).

The ageing profile of receivables at year-end is detailed below:

20162017NetImpairmentGrossNetImpairmentGross

$000's$000's$000's$000's$000's$000's3,29903,2994,32004,320Not past due

760766040604Past due 1-30 days4804834034Past due 31-60 days

3,316(2,342)5,6593,760(2,483)6,243Past due >61 days6,740(2,342)9,0828,717(2,483)11,200Total current portion

All receivables greater than 30 days in age are considered to be past due.

The impairment provision has been calculated based on a review of specific overdue receivables.

20162017ActualActual$000's$000's2,3422,483Individual impairment2,3422,483Total provision for impairment

Individually impaired receivables have been determined to be impaired because of the significant financial difficulties beingexperienced by the debtor. An analysis of these individually impaired debtors is as follows:

20162017ActualActual$000's$000's2,3422,483Past due >61 days2,3422,483Total individual impairment

Movements in the provision for impairment of receivables are as follows:

20162017ActualActual$000's$000's2,2582,342At 1 July458469Additional provisions made during the year(374)(329)Receivables written off during the period2,3422,483At 30 June

The Council holds no collateral as security or other credit enhancements over receivables that are either past due or impaired.


Note 10 - Inventory

Accounting policyInventories (such as spare parts and other items) held for distribution or consumption in the provision of services that arenot supplied on a commercial basis are measured at cost (using the FIFO method), and adjusted, when applicable, forany loss of service potential. Inventories acquired through non-exchange transactions are measured at fair value at thecurrent replacement cost at the date of acquisition.

The amount of any write-down for the loss of service potential or from cost to net realisable value is recognised in thesurplus or deficit in the period of the write-down.

Breakdown of inventory and further information


Held for distribution inventory:125102Water and sewerage reticulation spare parts125102Total inventory

Inventory held for distribution or consumption relates specifically to assets held for the replacement of key parts in the eventof other part failures at any of the wastewater plants around the district. Replaced parts are repaired, where appropriate, andheld for future use.

The write-down of inventory during the year was $22,723 (2016: $54,966). There have been no reversals of write-downs (2016:Nil).

No inventory is pledged as security for liabilities (2016: Nil).

Note 11 - Non-current assets held for sale

Accounting policyNon-current assets held for sale are classified as held for sale if their carrying amount will be recovered principally througha sale transaction rather than through continuing use. Non-current assets held for sale are measured at the lower of theircarrying amount and fair value less costs to sell.

Any impairment losses for write-downs of non-current assets held for sale are recognised in the surplus or deficit.

Any increases in fair value (less costs to sell) are recognised up to the level of any impairment losses that have beenpreviously recognised.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they areclassified as held for sale.

At balance date Council held no assets held for sale (2016: Nil).


Note 12 - Derivative financial instruments

Accounting policyDerivative financial instruments are used to manage exposure to interest rate risks arising from the Council's financingactivities. In accordance with its treasury policy, the Council does not hold or issue derivative financial instruments fortrading purposes.

Derivative financial instruments are initially measured at fair value on the contract date, and are re-measured to their fairvalue at each balance date. The fair value of interest rate swap contracts is determined by reference to market valuesfor similar instruments. Any gains or losses arising from changes in fair value are recognised in the surplus or deficit.

Derivatives embedded in other financial instruments or other non-financial host contracts are treated as separate derivativeswhen their risks and characteristics are not closely related to those of the host contract and the host contract is not carriedat fair value with unrealised gains or losses reported in the surplus or deficit.

The portion of the fair value of an interest rate derivative that is expected to be realised within 12 months of balance dateis classified as current, with the remaining portion classified as non-current.

The Council has elected not to apply hedge accounting to its derivative financial instruments.

Breakdown of derivative financial instruments and further information

20162017ActualActual$000's$000'sLiabilities

Current liability portion1,2691,303Interest rate swaps1,2691,303Total current liability portion

Non-current liability portion5,1383,265Interest rate swaps5,1383,265Total current liabilities portion6,4074,568Total derivative financial instrument liabilities

Fair value of interest rate swapsThe fair values of interest rate swaps have been determined by calculating the expected cash flows under the terms of theswaps and discounting these values to their present value. The inputs into the valuation model are from independently sourcedmarket parameters such as interest rate yield curves. Most market parameters are implied from instrument prices.

Information about interest rate swapsThe notional principal amounts of the outstanding interest rate swap contracts for the Council were $50.5 million (2016: $50.5million). $10 million of these interest rate swaps have start dates after year-end and are in line with forecasted borrowingrequirements. At 30 June 2017, the fixed interest rates of the outstanding interest rate swaps varied from 4.17% to 6.10%(2016: 4.17% to 6.10%).


Note 13 - Other financial assets

Accounting policyFinancial assets (other than shares in subsidiaries) are initially recognised at fair value plus transaction costs unless theyare carried at fair value through surplus or deficit in which case the transaction costs are recognised in the surplus ordeficit.

Term deposits, loans to subsidiaries and associates, and community loans (loans and receivables)Loans made at nil or below-market interest rates are initially recognised at the present value of their expected future cashflow, discounted at the current market rate of return for a similar financial instrument. For loans to community organisations,the difference between the loan amount and present value of the expected future cash flows of the loan is recognised inthe surplus or deficit as a grant expense.

After initial recognition, term deposits, loans to subsidiaries and associates, and community loans are measured atamortised cost using the effective interest method. Where applicable, interest accrued is added to the investment balance.

At year-end, the assets are assess for indicators of impairment. Impairment is established when there is evidence thatthe Council and group will not be able to collect amounts due according to the original terms of the receivable. Significantfinancial difficulties of the debtor, probability that the debtor will enter into bankruptcy, receivership or liquidation anddefault in payments are indicators that the asset is impaired.

If assets are impaired, the amount not expected to be collected is recognised in the surplus or deficit.

Listed and unlisted sharesShares (other than shares in subsidiaries) are designated at fair value through other comprehensive revenue and expense.

After initial recognition, the shares are measured at their fair value, with gains and losses recognised in other comprehensiverevenue and expense, except for impairment losses, which are recognised in the surplus or deficit. When sold, thecumulative gain or loss previously recognised in other comprehensive revenue and expense is transferred to the surplusor deficit.

For shares, a significant or prolonged decline in the fair value of the shares below its cost is considered to be objectiveevidence of impairment. If impairment evidence exists, the cumulative loss recognised in other comprehensive revenueand expense is transferred to the surplus or deficit.

Impairment losses on shares recognised in the surplus or deficit are not reversed through the surplus or deficit.

Breakdown of other financial assets and further information


Current portion8699Short-term deposits with maturities of 4-12 months8699Total current portion

Non-current portionInvestment in CCOs and similar entities:

660660Local Government Funding Agency131131Local Authority Shared Services Limited791791Total investment in CCOs and similar entities

Investment in other entities:4041New Zealand Local Government Insurance Corporation Limited1818Cooks Beach Wall Limited5860Total investment in other entities849850Total non-current portion935950Total other financial assets

Term depositsThe carrying amount of term deposits approximates their fair value.


Unlisted sharesThe fair value of Local Authority Shared Services Limited has not been disclosed because its fair value cannot be reliablymeasured, as there is no active market for this type of equity instrument. Therefore, this investment is held at cost.

The fair value of the Council's investment in NZ Local Government Insurance Corporation (trading as Civic Assurance) is$41,494 (2016: $39,595). This is based on the Council's share, currently 0.24% (2016: 0.24%), of the assets less liabilities ofthe company.

Due to the immaterial size and nature of the Council's investment in the LGFA, the Council has estimated the fair value of thisinvestment based on the LGFA's net asset backing as at 30 June.

ImpairmentThere are no impairment provisions for other financial assets. At balance date, none of these financial assets are either pastdue or impaired.

Note 14 - Investment in associate

Accounting policyAn associate is an entity, over which Council has significant influence and that is neither a subsidiary nor an interest ina joint venture. Investments in associates are recognised under the equity method of accounting as prescribed in PBEIPSAS 7 Investments in Associates whereby the investment in the associate is recognised at cost with the carrying amountadjusted to reflect the ownership interest in the associate.

Council has elected to recognise its interests in both the Hauraki Rail Charitable Trust and Destination Coromandel Trustas associates of Council. However, given that Council does not have an ownership interest in either trust and that noshare of the profit or loss is made to Council, it is impractical for Council to recognise its relationship with both truststhrough this method of accounting. Nevertheless, the relationship is recognised as a related party with the appropriatedisclosures made in accordance with PBE IPSAS 20 Related Party Disclosures.

Note 15 - Investment in joint venture

Accounting policyA joint venture is a binding arrangement whereby to or more parties are committed to undertake an activity that is subjectto joint control. Joint control is the agreed sharing of control over an activity.

Council has a 40% interest in a jointly controlled entity called the Thames Valley Emergency Operating Area (TVEOA).Council is the administering authority of this entity and accounts for its interest in this entity under the equity-method ofaccounting using the alternative disclosure of PBE IPSAS 7.

The Council's interests in the jointly controlled operation are as follows:20162017

ActualActual$000's$000's107114Current assets4133Non-current assets(30)(19)Current liabilities00Non-current liabilities

118127Net assets263205Revenue238196Expenses259Share of surplus/(deficit)


Note 16 - Property, plant and equipment

Accounting policyProperty, plant and equipment consist of the following types of assets and asset classes:

Operational assets - These include land, buildings and improvements, library books, furniture and fittings, plant andequipment, swimming pools, refuse processing and disposal, computer hardware, and motor vehicles.

Restricted assets - Restricted assets are parks and reserves owned by Council, which provide a benefit or service to thecommunity and cannot be disposed of because of legal or other restrictions.

Infrastructural assets - Infrastructure assets are the fixed utility systems owned by the Council including roads, footpaths,bridges and culverts, water, wastewater, storm water, reserve improvements and harbour facilities. Each asset classincludes that are required for the network to function.

Recognition and measurementLand (operation and restricted) is measured at fair value, and buildings, refuse processing and disposal and all infrastructuralassets are measured at fair value less accumulated depreciation. All other asset classes are measured at cost lessaccumulated depreciation and impairment losses.

Unformed or paper roadsAn unformed or paper road is a term for a road that is legally established and recorded in survey plans, but has not beenformed, and that ownership of the land associated with the paper road resides with the Council.

The Council does not recognise land under unformed paper roads in the financial statements because there is little orno service potential from the majority of these paper roads. Valuing these assets is also difficult. It is difficult to measurethe service benefit to the public from having access to these routes. There is also limited market data detailing recentsales of such small individual areas arguably due to the high cost of disposal.

RevaluationsLand (excluding land under roads) is revalued bi-annually, buildings and infrastructural assets are revalued annually toensure that their carrying amount does not differ materially from fair value. Land under roads was revalued in July 2011by Jordan Valuers. Subsequent land values reported have used the 2011 Jordan Valuers' valuation as a base and havehad the NZ Transport Agency's (NZTA) land valuation index values applied. The 2015 reported land values have beenindexed to 2016 values using the NZTA index based on the increase for urban and rural state highway land within eachward of the Council network.

The carrying value of land is assessed annually between the revaluation cycles to ensure that its does not differ materiallyfrom the assets' fair values. If there is a material difference, then the asset class is revalued.

Revalutions of property are accounting for on a class-of-asset basis.

The net revaluation results are credited or debited to other comprehensive revenue and expense and are accumulatedto an asset revaluation reserve in equity for that class-of-asset. Where this would result in a debit balance in the assetrevaluation reserve, this balance is not recognised in other comprehensive revenue and expense but is recognised inthe surplus or deficit. Any subsequent increase on revaluation that reverses a previous decrease in value recognised inthe surplus or deficit will be recognised first in the surplus or deficit up to the amount previously expensed, and thenrecognised in other comprehensive revenue and expense.

AdditionsThe cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that futureeconomic benefits or service potential associated with the item will flow to the Council and the cost of the item can bemeasured reliably.

Work in progress in recognised at cost less impairment and is not depreciated.

Property, plant, and equipment is initially recognised at cost. Where an asset is acquired through a non-exchangetransaction, it is recognised at fair value as at the date of acquisition.

DisposalsGains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset.Gains and losses on disposals are reported net in the surplus or deficit. When revalued assets are sold, the amountsincluded in the asset revaluation reserves in respect of those assets are transferred to accumulated funds.

Subsequent costsCosts incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits orservice potential associated with the item will flow to the Council and the cost of the item can be measured reliably.

The costs of day-today servicing of property, plant, and equipment are recognised in the surplus or deficit as they areincurred.


Accounting policy (continued)DepreciationDepreciation is provided on a straight-line basis on all property, plant and equipment. other than land and assets underconstruction (work in progress), at rates that will write-off the cost (or valuation) of the assets to their estimated residualvalues over their useful lives. The useful lives and associated depreciation rates of major classes of assets have beenestimated as follows:

Operational assets1.7%-50.0%2-60 yearsBuildings10.0%-33.3%3-10 yearsComputer hardware4.0%-50.0%2-25 yearsFurniture and fittings10.0%10 yearsLibrary collections4.0%-33.3%3-25 yearsPlant and machinery1.3%-20.0%5-80 yearsSolid waste2.0%-10.0%10-50 yearsSwimming pool

Infrastructural assets1.3%-20.0%5-80 yearsReserve improvements1.0%-1.7%60-100 yearsBridges2.0%-5.0%20-50 yearsFootpaths1.0%-20.0%5-100 yearsHarbour facilities1.0%-20.0%5-100 yearsWater1.0%-50.0%2-100 yearsWastewater1.0%-20.0%5-100 yearsStormwater1.0%-'10.0%10-99 yearsRoads

ImpairmentProperty, plant and equipment and intangible assets subsequently measured at cost that have a finite useful life arereviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not berecoverable.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.

If an asset's carrying amount exceeds its recoverable amount, the asset is regarded as impaired and the carrying amountis written-down to the recoverable amount. The total impairment loss is recognised in the surplus or deficit. The reversalof an impairment loss is recognised in the surplus or deficit.

Value in use for non-cash-generating assets

Non-cash-generating assets are those assets that are not held with the primary objective of generating a commercialreturn. For non-cash-generating assets, value in use is determined using an approach based on either a depreciatedreplacement cost approach, restoration cost approach, or a service units approach. The most appropriate approach usedto measure value in use depends on the nature of the impairment and the availability of information.

Assets under constructionAssets under construction are not depreciated. The total cost of a completed project is transferred to the relevant assetclass at balance date.

Critical accounting estimates and assumptionsLand (operational, restricted, and infrastructural)The most recent valuation of land was performed by an independent registered valuer, QV Valuations, Hamilton. Thevaluation is effective as at 1 July 2016.

Land is valued at fair value using market-based evidence based on its highest and best use with reference to comparableland values. Adjustments have been made to the “unencumbered” land value where there is a designation against theland or the use of the land is restricted because of reserve or endowment status. These adjustments are intended toreflect the negative effect on the value of the land where an owner is unable to use the land more intensely.

Buildings (operational and restricted)The most recent valuation of buildings was performed by an independent registered valuer, Curnow Tizard Limited,Hamilton. The valuation is effective as at 1 July 2016.


Critical accounting estimates and assumptions (continued)Specialised buildings are valued at fair value using depreciated replacement cost because no reliable market data isavailable for such buildings.

Depreciated replacement cost is determined using a number of significant assumptions. Significant assumptions include:

The replacement asset is based on the replacement with modern equivalent assets with adjustments whereappropriate for obsolescence due to over-design or surplus capacity.The replacement cost is derived from recent construction contracts of similar assets and Property Institute of NewZealand cost information.Where buildings are not readily tradable, such as public toilets, the valuer has assessed their value within thecontext of fair value being the price that they would expect the Council to pay for such a facility, if that situation hadarisen.The remaining useful life of assets is estimated.Straight-line deprecation has been applied in determining the depreciated replacement cost value of the asset.

Non-specialised buildings (for example, residential buildings) are valued at fair value using market-based evidence.Market rents and capitalisation rates were applied to reflect market value.

Infrastructural asset classesWastewater, water, stormwater, harbours, solid waste, parks and roads, footpaths and bridges are valued using thedepreciated replacement cost method. There are a number of estimates and assumptions exercised when valuinginfrastructural assets using the depreciated replacement cost method. These include:

Estimating any obsolescence or surplus capacity of the asset;Estimating the replacement cost of the asset. The replacement cost is derived from recent construction contractsin the region for similar assets. Where this information was not available, rates have been calculated based onthose used in the last valuation adjusted by the appropriate cost adjustment factor.Estimates of the remaining useful life over which the asset will be depreciated. These estimates can be affectedby the local conditions. For example, weather patterns and traffic growth. If useful lives do not reflect the actualconsumption of the benefits of the asset, then the Council could be over-or underestimating the annual depreciationcharge recognised as an expense in the statement of comprehensive revenue and expense. To minimise this risk,infrastructural asset useful lives have been determined with reference to the New Zealand Infrastructural AssetValuation and Depreciation Guidelines published by the National Asset Management Steering Group, and havebeen adjusted for local conditions based on past experience. Asset inspections, deterioration, and condition modellingare also carried out regularly as part of asset management planning activities, which provides further assuranceover useful life estimates.

AECOM of Hamilton was commissioned by Council to carry out an independent review of the methodology used tocomplete Council's infrastructure asset valuation as at 1 July 2016.

Opus International Consultants Limited of Paeroa performed the most recent valuation for all roading assets (includingfootpaths, bridges and land under roads), and the valuation is effective as at 1 July 2016.

Total Council property, plant and equipment


1,330,3381,350,522Cost - opening balance(23,860)(24,869)Accumulated depreciation and impairment

1,306,4781,325,653Total - opening balance22,62628,620Current year additions(3,517)(3,372)Current year disposals

4281,858Current year disposals depreciation(17,929)(17,876)Current year depreciation charge(16,492)(16,979)Reversed on revaluation - Cost16,49216,979Reversed on revaluation - Accumulated depreciation17,56797,513Revaluation surplus

1,325,6531,432,395Total - closing balance1,350,5221,456,303At cost - closing balance(24,869)(23,909)Accumulated depreciation and impairment

1,325,6531,432,395Total Council property, plant and equipment - closing balance


Movement in the carrying value for each class of property, plant and equipment are as follows:

Buildings

20162017ActualActual$000's$000's26,51527,440Buildings - at cost - opening balance(934)(982)Accumulated depreciation and impairment

25,58226,458Total buildings - opening balance738459Current year additions(40)0Current year disposals20Current year disposals depreciation

(983)(1,068)Current year depreciation charge(934)(982)Reversed on revaluation - Cost934982Reversed on revaluation - Accumulated depreciation

1,1601,925Revaluation surplus26,45827,774Total buildings - closing balance27,44028,842Buildings - at cost - closing balance(982)(1,068)Accumulated depreciation and impairment

26,45827,774Total buildings - closing balance

Computer hardware

20162017ActualActual$000's$000's3,2733,719Computer hardware - at cost - opening balance(2,967)(3,127)Accumulated depreciation and impairment

306592Total computer hardware - opening balance474449Current year additions(28)(147)Current year disposals28145Current year disposals depreciation00Reversed on revaluation - Cost00Reversed on revaluation - Accumulated depreciation

(188)(246)Current year depreciation charge592794Total computer hardware - closing balance

3,7194,021Computer hardware - at cost - closing balance(3,127)(3,228)Accumulated depreciation and impairment

592794Total computer hardware - closing balance

Furniture and fittings

20162017ActualActual$000's$000's2,1062,176Furniture and fittings - at cost - opening balance(1,531)(1,632)Accumulated depreciation and impairment

574544Total furniture and fittings - opening balance11657Current year additions(46)(725)Current year disposals41725Current year disposals depreciation00Reversed on revaluation - Cost00Reversed on revaluation - Accumulated depreciation

(141)(131)Current year depreciation charge544471Total furniture and fittings - closing balance

2,1761,508Furniture and fittings - at cost - closing balance(1,632)(1,037)Accumulated depreciation and impairment

544471Total furniture and fittings - closing balance


Operational land

20162017ActualActual$000's$000's68,06567,445Operational land - at cost - opening balance

00Accumulated depreciation and impairment68,06567,445Total operational land - opening balance

00Current year additions(620)(57)Current year disposals

00Current year disposals depreciation00Current year depreciation charge00Reversed on revaluation - Cost00Reversed on revaluation - Accumulated depreciation013,658Revaluation surplus

67,44581,046Total operational land - closing balance67,44581,046Operational land - at cost - closing balance

00Accumulated depreciation and impairment67,44581,046Total operational land - closing balance

Library collections

20162017ActualActual$000's$000's1,8431,953Library collections - at cost - opening balance(1,121)(1,262)Accumulated depreciation and impairment

722691Total library collections - opening balance110116Current year additions00Current year disposals00Current year disposals depreciation00Reversed on revaluation - Cost00Reversed on revaluation - Accumulated depreciation

(141)(141)Current year depreciation charge691666Total library collections - closing balance

1,9532,069Library collections - at cost - closing balance(1,262)(1,403)Accumulated depreciation and impairment

691666Total library collections - closing balance

Plant and machinery

20162017ActualActual$000's$000's3,1603,286Plant and machinery - at cost - opening balance(1,749)(1,869)Accumulated depreciation and impairment1,4111,417Total plant and machinery - opening balance335365Current year additions(210)(1,005)Current year disposals162810Current year disposals depreciation00Reversed on revaluation - Cost00Reversed on revaluation - Accumulated depreciation

(282)(285)Current year depreciation charge1,4171,303Total plant and machinery - closing balance3,2862,646Plant and machinery - at cost - closing balance(1,869)(1,344)Accumulated depreciation and impairment1,4171,303Total plant and machinery - closing balance


Solid waste

20162017ActualActual$000's$000's4,4794,458Solid waste - at cost - opening balance(198)(206)Accumulated depreciation and impairment4,2814,252Total solid waste - opening balance

98369Current year additions(4)(1)Current year disposals10Current year disposals depreciation

(207)(216)Current year depreciation charge(198)(206)Reversed on revaluation - Cost198206Reversed on revaluation - Accumulated depreciation8490Revaluation surplus

4,2524,495Total solid waste - closing balance4,4584,710Solid waste - at cost - closing balance(206)(215)Accumulated depreciation and impairment4,2524,495Total solid waste - closing balance

Bridges

20162017ActualActual$000's$000's16,42318,001Bridges - at cost - opening balance(341)(363)Accumulated depreciation and impairment

16,08217,639Total bridges - opening balance1,0290Current year additions(70)0Current year disposals20Current year disposals depreciation

(365)(358)Current year depreciation charge(341)(363)Reversed on revaluation - Cost341363Reversed on revaluation - Accumulated depreciation960(269)Revaluation surplus

17,63917,012Total bridges - closing balance18,00117,369Bridges - at cost - closing balance(363)(358)Accumulated depreciation and impairment

17,63917,012Total bridges - closing balance

Footpaths

20162017ActualActual$000's$000's18,24516,444Footpaths - at cost - opening balance(756)(714)Accumulated depreciation and impairment

17,48915,730Total footpaths - opening balance478775Current year additions(9)(22)Current year disposals11Current year disposals depreciation

(715)(731)Current year depreciation charge(756)(714)Reversed on revaluation - Cost756714Reversed on revaluation - Accumulated depreciation

(1,514)505Revaluation surplus15,73016,258Total footpaths - closing balance16,44416,988Footpaths - at cost - closing balance(714)(730)Accumulated depreciation and impairment

15,73016,258Total footpaths - closing balance


Harbour facilities

20162017ActualActual$000's$000's7,2317,517Harbour facilities - at cost - opening balance(178)(195)Accumulated depreciation and impairment7,0537,323Total harbour facilities - opening balance599548Current year additions0(0)Current year disposals00Current year disposals depreciation

(195)(193)Current year depreciation charge(178)(195)Reversed on revaluation - Cost178195Reversed on revaluation - Accumulated depreciation(134)(478)Revaluation surplus7,3237,199Total harbour facilities - closing balance7,5177,392Harbour facilities - at cost - closing balance(195)(193)Accumulated depreciation and impairment7,3237,199Total harbour facilities - closing balance

Reserve improvements

20162017ActualActual$000's$000's14,47115,046Reserve improvements - at cost - opening balance(967)(1,051)Accumulated depreciation and impairment

13,50413,995Total reserve improvements - opening balance1,4084,587Current year additions(68)(68)Current year disposals1212Current year disposals depreciation

(1,063)(1,127)Current year depreciation charge(967)(1,051)Reversed on revaluation - Cost9671,051Reversed on revaluation - Accumulated depreciation2021,230Revaluation surplus

13,99518,628Total reserve improvements - closing balance15,04619,743Reserve improvements - at cost - closing balance(1,051)(1,116)Accumulated depreciation and impairment13,99518,628Total reserve improvements - closing balance

Roads


598,628611,980Roads - at cost - opening balance(4,455)(4,573)Accumulated depreciation and impairment

594,172607,407Total roads - opening balance9,2838,459Current year additions(1,289)(1,172)Current year disposals

166155Current year disposals depreciation(4,738)(4,243)Current year depreciation charge(4,455)(4,573)Reversed on revaluation - Cost4,4554,573Reversed on revaluation - Accumulated depreciation9,81432,920Revaluation surplus

607,407643,526Total roads - closing balance611,980647,615Roads - at cost - closing balance(4,573)(4,089)Accumulated depreciation and impairment

607,407643,526Total roads - closing balance


Stormwater

20162017ActualActual$000's$000's96,48898,625Stormwater - at cost - opening balance(1,375)(1,412)Accumulated depreciation and impairment95,11397,213Total stormwater - opening balance1,4261,197Current year additions(75)(2)Current year disposals10Current year disposals depreciation

(1,413)(1,446)Current year depreciation charge(1,375)(1,412)Reversed on revaluation - Cost1,3751,412Reversed on revaluation - Accumulated depreciation2,1601,215Revaluation surplus97,21398,177Total stormwater - closing balance98,62599,623Stormwater - at cost - closing balance(1,412)(1,446)Accumulated depreciation and impairment97,21398,177Total stormwater - closing balance

Wastewater


157,401159,527Wastewater - at cost - opening balance(4,567)(4,702)Accumulated depreciation and impairment

152,833154,825Total wastewater - opening balance3,6061,583Current year additions(98)(74)Current year disposals58Current year disposals depreciation

(4,708)(4,792)Current year depreciation charge(4,567)(4,702)Reversed on revaluation - Cost4,5674,702Reversed on revaluation - Accumulated depreciation3,187719Revaluation surplus

154,825152,269Total wastewater - closing balance159,527157,053Wastewater - at cost - closing balance(4,702)(4,784)Accumulated depreciation and impairment

154,825152,269Total wastewater - closing balance

Water


104,605105,113Water - at cost - opening balance(2,719)(2,782)Accumulated depreciation and impairment

101,885102,331Total water - opening balance1,7582,833Current year additions(178)(37)Current year disposals

82Current year disposals depreciation(2,790)(2,899)Current year depreciation charge(2,719)(2,782)Reversed on revaluation - Cost2,7192,782Reversed on revaluation - Accumulated depreciation1,6481,928Revaluation surplus

102,331104,158Total water - closing balance105,113107,055Water - at cost - closing balance(2,782)(2,898)Accumulated depreciation and impairment

102,331104,158Total water - closing balance


Reserves land


204,456204,399Reserves land - at cost - opening balance00Accumulated depreciation and impairment

204,456204,399Total reserves land - opening balance643937Current year additions(700)0Current year disposals

00Current year disposals depreciation00Current year depreciation charge00Reversed on revaluation - Cost00Reversed on revaluation - Accumulated depreciation044,070Revaluation surplus

204,399249,406Total reserves land - closing balance204,399249,406Reserves land - at cost - closing balance

00Accumulated depreciation and impairment204,399249,406Total reserves land - closing balance

Tangible work in progress

20162017ActualActual$000's$000's2,9513,392Work in progress - at cost - opening balance

00Accumulated depreciation and impairment2,9513,392Total work in progress - opening balance5235,886Current year additions(83)(63)Current year disposals

3,3929,215Total work in progress - closing balance3,3929,215Work in progress - at cost - closing balance

00Accumulated depreciation and impairment3,3929,215Total work in progress - closing balance

Work in progress


10Airfields010Buildings01,521Harbours690Cemetries125125Coastal & Hazard Management7190Harbours120Libraries

1,9294,965Parks & Reserves19926Public Conveniences20Representation

164911Roading017Solid Waste9177Stormwater70Wastewater

337563Water3,3929,215Total work in progress


DisposalsThe carrying book value of the amount disposed was $1.51 million.

There were no significant disposal of work in progress for the year.

ImpairmentThere have been no impairment losses recognised for plant and equipment (2016: nil).

SecurityNo property, plant or equipment has been pledged as security for any liability.

RestrictionsLand in the "Restricted Asset" category is subject to either restrictions on use, or disposal, or both. This includes restrictionsfrom legislation (such as land declared as a reserve under the Reserves Act 1977), or other restrictions (such as land under abequest or donation that restricts the purpose for which the assets can be used).

Capital commitmentsThe amount of contractual commitments for acquisition of property, plant, and equipment is:


Capital commitments027Buildings0286Bridges

507661Roads and footpaths0451Wastewater0583Stormwater

497869Water1,17730Harbour facilities520173Reserve improvements

2,7013,081Total capital commitments


Additional disclosuresCore infrastructure asset disclosuresIncluded within the Council infrastructure assets above are the following core Council assets:

Most recentreplacement costAdditions:

transferred toCouncil

Additions:constructed by

Council

Closing bookvalue estimate for

revalued assets$000's$000's$000's$000's

2017Water

35,64401,68521,047treatment plants and facilities135,33635479383,111other assets (such as reticulation system)

Wastewater107,98707476,998treatment plants and facilities127,9094081,10175,271other assets (such as reticulation system)

Stormwater3,4420472,470treatment plants and facilities

140,54072742395,707other assets (such as reticulation system)Roads and footpaths

774,1001,7007,535676,796Roads and footpath assets2016Water

35,035040720,256treatment plants and facilities132,03939895382,075other assets (such as reticulation system)

Wastewater105,4465182,36279,443treatment plants and facilities125,5667071975,382other assets (such as reticulation system)

Stormwater3,400282282,760treatment plants and facilities

137,64476834894,453other assets (such as reticulation system)Roads and footpaths

735,9502,4788,312640,776Roads and footpath assets

Insurance of Council assetsThe following information relates to the insurance of Council assets as at 30 June:


482,859503,628The total value of all Council assets covered by insurance contracts223,330248,277The maximum amount to which insured assets are insured480,512501,395The total value of all Council assets covered by financial risk sharing arrangements215,000216,000Maximum amount available to the Council under financial risk sharing arrangements

00Total value of assets that are self-assured00The value of funds maintained for self-insurance

In the event of a natural disaster, central government may contribute up to 60% towards the restoration of water, drainage andsewerage assets, and provide a subsidy towards the restoration of roads


Note 17 - Intangible assets

Accounting PolicySoftware acquisition and developmentAcquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use thespecific software.

Costs that are directly associated with the development of software for internal use, are recognised as an intangible asset.Direct costs include the software development employee costs and an appropriate portion of relevant overheads.

Staff training costs are recognised in the surplus or deficit when incurred.

Costs associated with maintaining computer software are recognised as an expense when incurred.

Costs associated with the development and maintenance of the Council's website are recognised as an expense whenincurred.

EasementsEasements are not cash generating in nature, instead they give Council the right to access private property whereinfrastructural assets are located.

The Council has not valued and recognised easements as an intangible asset under PBE IPSAS 31 Intangibles. Thework required identifying and developing a central register to record easements and paper roads would be considerableand difficult to ensure that it was comprehensive and complete. The Council is also concerned that the cost to establishthe register would be substantial with minimal benefits being achieved. Registered valuers would have difficulty determininga fair value for the easements due to their unique nature, and having no active market for this particular asset type. Thereis also no recognised valuation methodology.

For these reasons, the Council has opted not to recognise easements as an intangible asset because they cannot bequantified and the value of the easements cannot be measured reliably.

Resource consentsIt is difficult to determine the fair value of resource consents due to their specialised nature and having no active marketto compare values against. For these reasons, the Council holds resource consents at deemed cost and they are amortisedover the life of the asset.

AmortisationThe carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisationbegins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation chargefor each period is recognised in the surplus or deficit.

The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

20% to 33%3-5 yearsComputer software3% to 20%5-35 yearsResource consents20%5 yearsAerial photography

Impairment of property, plant and equipment and intangible assetsIntangible assets subsequently measured at cost that have an indefinite useful life, or are not yet available for use, arenot subject to amortisation and are tested annually for impairment.

Breakdown of intangible assets and further information

20162017ActualActual$000's$000's11,41811,506Cost - opening balance(5,342)(5,540)Accumulated amortisation and impairment6,0765,965Total - opening balance701518Current year additions(614)(372)Current year disposals494372Disposal accumulated amortisation(692)(647)Amortisation charge5,9655,837Total - closing balance11,50611,652At cost - closing balance(5,540)(5,815)Accumulated amortisation and impairment5,9655,837Total Council intangible assets - closing balance


Movements in the carrying value for each class of intangible assets are as follows:

Computer software

20162017ActualActual$000's$000's4,2153,897Computer software - at cost - opening balance(3,254)(3,084)Accumulated amortisation and impairment

961813Total computer software - opening balance285482Current year additions(603)(373)Current year disposals494372Disposal accumulated amortisation(324)(336)Amortisation charge813958Total computer software - closing balance

3,8974,006Computer software - at cost - closing balance(3,084)(3,048)Accumulated amortisation and impairment

813958Total computer software - closing balance

Aerial photography

20162017ActualActual$000's$000's443443Aerial photography - at cost - opening balance(443)(443)Accumulated amortisation and impairment

00Total aerial photography - opening balance00Current year additions00Current year disposals00Disposal accumulated amortisation00Amortisation charge00Total aerial photography - closing balance

443443Aerial photography - at cost - closing balance(443)(443)Accumulated amortisation and impairment

00Total aerial photography - closing balance

Resource consents

20162017ActualActual$000's$000's5,9996,781Resource consents - at cost - opening balance(1,646)(2,014)Accumulated amortisation and impairment4,3534,767Total resource consents - opening balance782210Current year additions00Current year disposals00Disposal accumulated amortisation

(368)(311)Amortisation charge4,7674,665Total resource consents - closing balance6,7816,991Resource consents - at cost - closing balance(2,014)(2,326)Accumulated amortisation and impairment4,7674,665Total resource consents - closing balance


Work in progress

20162017ActualActual$000's$000's761385Work in progress - at cost - opening balance00Accumulated amortisation and impairment

761385Total work in progress - opening balance(364)(173)Current year additions(11)0Current year disposals00Disposal accumulated amortisation00Amortisation charge

385212Total work in progress - closing balance385212Work in progress - at cost - closing balance00Accumulated amortisation and impairment

385212Total work in progress - closing balance

Work in progressThe total amount of intangible assets in the course of construction is $0.2 million (2016: $0.4 million). The negative movementof $0.2 million is WIP disposed and/or capitalised.

RestrictionsThere are no restrictions over the title of intangible assets. No intangible assets are placed as security for liabilities.

Capital commitmentsThe amount of contractual commitments for acquisition of intangible assets are:


Capital commitments19471Intangible assets19471Total capital commitments

Note 18 - Depreciation and amortisation expense by group of activity

Directly attributable depreciation and amortisation by group of activity


66Representation00Planning & regulation4449Managing the environment3032Protection of people & the environment

5,8225,322Roading2,1912,307Community spaces

84102Economic development1,4181,451Stormwater4,9905,040Wastewater

00Land use2,8792,964Water supply207216Solid waste

17,67217,491Total directly attributable depreciation and amortisation by group of activity9501,032Depreciation and amortisation not directly related to a group of activities

18,62118,523Total depreciation and amortisation expense


Note 19 - Forestry

Accounting policyStanding forestry assets are independently revalued annually at fair value less estimated point of sale costs for harvesting,transport, roading and management for one growth cycle. Fair value is determined based on the present value of expectednet cash flows that would arise if the asset were harvested today, discounted at a current market determined pre-tax rate.This calculation is based on existing sustainable felling plans and assessments regarding growth, timber prices, fellingcosts and silvicultural costs and takes into consideration environmental, operational and market restrictions. The valuationis of standing timber only, exclusive of the underlying land value.

Gains or losses arising on initial recognition of forestry assets at fair value less estimated point of sale costs and from achange in fair value less estimated point of sale costs are recognised in the surplus or deficit.

Forestry maintenance costs are included in the surplus or deficit when incurred.

Breakdown of forestry assets and further information

20162017ActualActual$000's$000's2,9312,749Balance at 1 July

00Increases due to purchases182232Gains / (losses) arising from changes attributable to physical changes163(109)Gains / (losses) arising from changes attributable to price changes(527)(349)Decreases due to harvest2,7492,523Balance at 30 June

The Council owns the trees standing on approximately 286 hectares of Crown land in Whangamata and Tairua consistingpredominately of Pinus Radiata at various stages of maturity ranging from 1 to 40 years.

The land is owned by the Crown as State Forest and is leased to Rayonier (Matariki Forests) under a Crown Forests License.The Council occupies this land under the terms of a separate Crown Forest License. The land continues to be Crown owneduntil such time as the Crown disposes of it.

A licence fee is payable in respect of the Tairua forest and is based on the market value of the land. The Council has provideda guarantee to the Crown for the amount of $45,000 to cover the part of the Tairua Crown Forest subject to a Crown ForestLicence. The Council guarantee is noted as a contingent liability.

42.2 hectares of trees were harvested in May and June 2016 (2016: 25.2 hectares).

There are no restrictions over the title of the forestry assets. No forestry assets are pledged as security for liabilities.

Valuation assumptionsIndependent registered valuers, Hammond Resource Management Ltd have valued the forestry assets as at 30 June 2017.The following significant valuation assumptions have been adopted in determining the fair value of forestry assets:

The forestry has been valued on a going concern basis and includes only the value of the existing crops on a singlerotation basis.No allowance for inflation has been provided.Costs are current average costs. No allowance has been made for cost improvements in future operations.Log prices are based on a 3-year historical rolling average.The value is of standing timber only, exclusive of the value of the underlying land.A compound interest rate of 3% (2016: 3%) has been adopted as an appropriate compounding rate.A discount rate of 6% (2016: 6%) has been used in discounting the present value of expected cash flows.

The Council has not incurred any deforestation obligations (as defined in the New Zealand Emissions Trading Scheme (ETS))as at 30 June 2017.

Should any future obligations arise under the ETS, Council will be required to purchase New Zealand Carbon Credit Units tosurrender (NZUs) in order to offset this obligation. These units can only be settled with cash.

Financial risk management strategiesCouncil is exposed to financial risks arising from changes in timber prices. Council intends to hold the forestry long-term anddoes not expect timber prices to decline significantly in the foreseeable future. Therefore, no measures have been taken tomanage the risks of a decline in timber prices. Council reviews its outlook for timber prices regularly in considering the needfor active financial risk management.


Treaty settlementThe land the trees currently occupy is likely to be transferred to iwi as part of a Treaty Settlement.

While this has not yet occurred, it is likely in the near term (1-3 years). It has been suggested that such a transfer may impacton the Council’s ability to dispose of wastewater to land. Should this occur, Council's only other option is for the disposal oftreated effluent to water.

It should be noted however, that discussions to date indicate that it is more than likely that Council will retain the ability todischarge the treated effluent to land should the transfer of land ownership occur.

Note 20 - Payables and deferred revenue

Accounting PolicyShort-term creditors and other payables are recorded at their face value.

Breakdown of payables and other information


Payables and deferred revenue under exchange transactions10,81414,806Trade payables and accrued expenses

00Amounts due to associates and joint venture10,81414,806Total payables and deferred revenue under exchange transactions

Payables and deferred revenue under non-exchange transactions2,2382,430Revenue in advance

00Income tax payable2916Other tax payable (e.g. GST and FBT)00Grants payable

6640Other grants and bequests received subject to substantive conditions not yet met2,9322,446Total payables and deferred revenue under non-exchange transactions13,74617,252Total payables and deferred revenue

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms (excluding contract retentions).Therefore, the carrying value of creditors and other payables approximates their fair value.

Note 21 - Borrowings

Accounting PolicyBorrowings are initially recognised at their fair value plus transaction costs. After initial recognition, all borrowings aremeasured at amortised cost using the effective interest method.

Borrowings are classified as current liabilities unless the Council has an unconditional right to defer settlement of theliability for at least 12 months after balance date.

Financial guarantee contractsA financial guarantee contract is a contract that requires the Council to make specified payments to reimburse the holderof the contract for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts have not been provided for in the statement of financial position because the Council hasassessed the probability of a financial guarantee being called up as 'less than likely to occur' and the club or organisationhas provided an indemnity to the Council that transfers ownership of the assets to the Council in the event of the guaranteebeing called up. The Council's exposure to any risk is therefore mitigated and minimal. As such, financial guarantees aredisclosed as a contingent liability because it is less likely than not that a present obligation exists.


Breakdown of borrowings and other financial liabilities and further information


Current portion00Finance leases012,200Secured loans012,200Total current portion

Non-current portion00Finance leases

35,00023,000Secured loans35,00023,000Total non-current portion35,00035,200Total borrowings and other financial liabilities

Interest terms for secured loansThe following facilities are issued at floating rates of interest and reset quarterly based on the 90-day bill rate plus a margin forcredit risk.

SecurityCouncil no longer holds an overdraft facility (2016: $250,000).

Council's term loans are secured through a debenture, which grants security to the lender by way of a charge over the Council'sgeneral rates and rates revenue.

Description of leasing arrangementsThe Council does not have any current finance leases.

Internal borrowings disclosureInformation on internal borrowings per activity group for is provided in the tables below. Internal borrowings are eliminated onconsolidation of activities in the Council's financial statements.

Interest paidBalance at 30June

RepaymentsBorrowingsBalance at 1July

$000's$000's$000's$000's$000'sYear ended 30 June 20171241,332(72)601,344Representation666(4)366Planning and regulation

62606(33)27611Protection of people & theenvironment

2324,301(232)1944,339Roads & footpaths4614,770(258)2154,812Community spaces41371(20)17374Economic development1334,553(246)2054,593Stormwater

2,68544,752(2,416)2,01845,150Wastewater4198,393(453)3788,467Water1732,125(115)962,144Solid waste

4,33471,268(3,847)3,21471,902Total

Interest paidBalance at 30June

RepaymentsBorrowingsBalance at 1July

$000's$000's$000's$000's$000'sYear ended 30 June 20161211,344(255)2721,327Representation666(13)1366Planning and regulation

59611(116)124603Protection of people & theenvironment

2394,339(822)8794,282Roads & footpaths4594,812(912)9754,749Community spaces34374(71)76369Economic development2664,593(870)9314,533Stormwater

2,94745,150(8,555)9,15044,554Wastewater4308,467(1,604)1,7168,356Water1822,144(406)4352,116Solid waste

4,74271,902(13,624)14,57170,954Total


Loan to finance interest expenseIncluded in internal borrowings for the year under review is the amount of $1,454,321 (2016: $2,065,989) which was raised tofund the interest on additional capacity loans which were not met by developer’s contributions. This is in accordance with theCouncil’s Development Contributions Policy.

Fair valuesDue to interest rates on debt resetting to the market rate every three months, the carrying amounts of secured loans approximatestheir fair value.

Note 22 - Employee entitlements

Accounting PolicyEmployee entitlementsShort-term employee entitlementsEmployee benefits expected to be settled within 12 months after the end of the period in which the employee renders therelated service are measured on accrued entitlements at current rates of pay. These include salaries and wages accruedup to balance date, annual leave earned to, but not yet taken at balance date, and sick leave.

A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than thesick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlementthat can be carried forward at balance date; to the extent it will be used by staff to cover those future absences.

A liability and an expense are recognised for bonuses where the Council has a contractual obligation, or where a pastpractice has created a constructive obligation.

Long-term employee entitlementsEmployee benefits that are due to be settled beyond 12 months after the end of the period in which the employee rendersthe related service, such as long service leave and retirement gratuities, have been calculated on an actuarial basis. Thecalculations are based on:

Likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staffwill reach the point of entitlement; and contractual entitlement information; andThe present value of estimated future cash flows.

Presentation of employee entitlementsSick leave, annual leave, vested long service leave, and non-vested long service leave and retirement gratuities expectedto be settled within 12 months of balance date, are classified as a current liability. All other employee entitlements areclassified as a non-current liability.

Key assumptions in measuring retirement and long service leave obligationsThe present value of retirement and long service leave obligations depend on a number of factors that are determinedon an actuarial basis. Two key assumptions used in calculating this liability include the discount rate and the salaryinflation factor. Any changes in these assumptions will affect the carrying amount of the liability.

Expected future payments are discounted using forward discount rates derived from the yield curve of New Zealandgovernment bonds. The discount rates used have maturities that match, as closely as possible, the estimated future cashoutflows. The salary inflation factor has been determined after considering historical salary inflation patterns and afterobtaining advice from an independent actuary. An average discount rate of 3.37% (2016: 3.37%) and a salary inflationfactor of 3.00% (2016: 3.00%) were used.


Breakdown of employee entitlements and further information


Current portion237332Accrued pay

1,2551,222Annual leave117125Retirement and long service leave3644Sick leave

1,6441,723Total current portionNon-current portion

200190Retirement and long service leave200190Total non-current portion

1,8441,913Total employee entitlements

Note 23 - Provisions

Accounting PolicyA provision is recognised for future expenditure of uncertain amount or timing when there is a present obligation (eitherlegal or constructive) as a result of a past event, and it is probable that an outflow of future economic benefits will berequired to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation usinga pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to theobligation. The increase in the provision due to the passage of time is recognised as an interest expense and is includedin 'finance costs'.

Breakdown of provisions and further information


Current portion6783Landfill aftercare946294Weathertightness claims440Reserve contribution credits250250Other sundry provisions

1,307626Total current provisionsNon-current portion

725691Landfill aftercare8056Weathertightness claims

5,0984,515Reserve contribution credits5,9035,262Total non-current portion7,2115,889Total provisions

Movements of each class of provision are as follows:

Landfill aftercare costs

20162017ActualActual$000's$000's801792Opening balance as at 1 July04Additional provisions made

(116)(63)Amounts used(54)0Unused amounts reversed16040Discount unwind792774Closing balance as at 30 June


Provision for weathertightness claims

20162017ActualActual$000's$000's2,5811,026Opening balance as at 1 July

00Additional provisions made(1,293)0Amounts used(262)(676)Unused amounts reversed1,026350Closing balance as at 30 June

Reserve contribution credits

20162017ActualActual$000's$000's5,1425,142Opening balance as at 1 July

00Additional provisions made0(627)Amounts used00Unused amounts reversed

5,1424,515Closing balance as at 30 June

Other sundry provisions


0250Opening balance as at 1 July2500Additional provisions made00Amounts used00Unused amounts reversed

250250Closing balance as at 30 June

Landfill aftercare costsThe Council has a legal obligation to provide on-going maintenance and monitoring services at its five closed landfill sites. Aprovision for post-closure costs is recognised as a liability in the statement of financial position. The provision is measuredbased on the present value of future cash outflows expected to be incurred, taking into account future events including newlegal requirements and known improvements in technology. The provision includes all known costs associated with landfillpost-closure. All landfills within the Thames-Coromandel district are now closed and no longer accept waste for disposal.

Closed landfill sites have been assessed in terms of the likely discharge and land-use risks and are managed accordingly.Consents to manage the environmental effects of certain closed landfills are held with the Waikato Regional Council (WRC)and compliance with these consents is Council’s responsibility.

Sites are regularly monitored as per the consent requirements. This includes water monitoring and visual inspections. Expenditureon rehabilitation works may be required to minimise potential impacts on the environment or human health. The long-termnature of the liability means that there are inherent uncertainties in estimating costs that will be incurred. Any such work willbe funded by an internal loan, which is serviced by the general rate.

The provision has been estimated taking into account existing technology and known changes to legal requirements. The grossprovision before discounting is $1.32 million (2016: $1.39 million). The following major assumptions have been made incalculating the provision:

The discount rate used to arrive at the present value is 5.76% (2016: 5.80%).The aftercare has been estimated to continue until 2044. The annual inflation factor applied to the estimated aftercarecosts for 2018/2019 to 2023/2024 is the September 2014 Local Government price level change forecast. An annualinflation rate of 3.23% has been applied to years 2025/2026 to 2043/2044 (2016: an annual inflation rate of 3.23% wasapplied to years 2025/2026 to 2043/2044).Estimates of the life and future expenditure are based on the 2015-2025 Long-term Plan.

Provision for weathertightness claimsAs a result of legal precedent that Councils are liable for a share of leaky homes repair costs, a provision for estimated settlementcosts has been recognised as a liability in the statement of financial position. The provision is measured based on the presentvalue of future cash outflows expected to be incurred, taking into account future events. The provision includes all expectedsettlement costs. When there is a high level of uncertainty, a contingent liability is recognised.


This provision is based on the Council’s most likely exposure to notified claims. As at 30 June 2017, Council was aware ofeight unsettled notified claims (2016:9).

See Note 25 contingent liabilities for further disclosure and comment.

Reserve contribution creditsA provision has been established in the statement of financial position for the estimated liability associated with historic reservecontribution credits, as a result of subdivision's vesting of reserves prior to the introduction of the Development ContributionPolicy in October 2004. In addition to this, a provision has been established for reserve contribution credits associated with thedevelopment of the Whitianga multi-sports complex centre.

Council has negotiated with a developer to purchase 10 hectares of land situated in Whitianga for the development of aMulti-Sports Complex Centre. As part of this purchase agreement, Council entered into a development contributions deed withthe developer, which outlined when development and reserve contributions credits would be considered payable to the Council.It also outlined the staged arrangement in which the Council would purchase the land from the developer.

The agreement stated that Council would purchase the three individual parcels of land (totalling $6.5 million) on the followingdates:

Lot 1 DP 440527 on 30 April 2011Lot 2 DP 440527 on 30 September 2011; andLot 3 DP 440527 on 30 September 2012.

The agreement also stated that the developer would be invoiced for:

314 development/reserve contribution credits on 30 April 2011155 development contribution credits on 30 September 2011; andA further 155 development contributions on 30 September 2012.

As at 30 June 2017, all parcels of land had been purchased from the developer and all corresponding development and reservecontributions had been invoiced. However, as at 30 June 2017 only $2,029,067 of the reserve contribution credits have beenapplied and therefore recognised within Council’s accounts as revenue. As such, a provision of $4,470,875 was recognisedwithin Council’s balance sheet reflecting that at balance date these contribution credits were effectively revenue received inadvance by Council. As further development contributions credits fall due, the provision will be used to offset any further liabilityestablished by the developer.

In addition to the above, a further provision of $44,058 has been recognised for historic reserve contribution credits as a resultof subdivision’s vesting of reserves prior to the introduction of the development contribution policy in October 2004. Applicationsto recognise these historic reserve credits under the Local Government Act 2002 (LGA) are being addressed by Council on acase-by-case basis.

In the past, a reserve contribution credit has been provided to a number of developers for additional reserves land vested inthe Council that was over and above the requirement under the Resource Management Act 1991. The reserve contributionrequirement under the transitional provisions of the Resource Management Act 1991 was 130m2. The credit was then availablefor developers to apply against reserve contributions required on any subsequent subdivisions. In order to ascertain thedevelopment contributions payable, the Local Government Act 2002 and our Development Contributions Policy, require Councilto calculate the average market value of each 15m2 additional allotment. Usually this is done by way of an external valuation.For this reason, the conversion of these historic reserve credits issued under the Resource Management Act 1991 are difficultto measure and quantify under the Local Government Act 2002.

The provision recognises that these credits will result in an outflow of resources embodying economic benefits to Council.However, estimating the value of these credits is uncertain because it relies on factors such as the future development potentialof any residual land, future land values, the value of the land when vested, the zoning of the land and any other district planmechanism (such as structure plans) and the reasons for the land being vested at the time.

See Note 25 contingent Liabilities for further disclosure and comment.

Other sundry provisionsAs at 30 June 2017, Council anticipates that the following payments will be made:

A one off payment of $100,000 will be made to the affected parties of the 1877 Native Lands Agreement as part of a finalsettlement agreement negotiated by Waikato Regional Council, affected ratepayers and Council.A one off disturbance payment of $100,000 and a one off instalment payment of $50,000 for a kiosk/reception facility asper an agreement reached for the use of the land at Mercury Bay for a carpark facility.

See Note 25 contingent liabilities for further disclosure and comment.


Note 24 - Construction contracts

Accounting PolicyContract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage ofcompletion of the contract at balance date. The stage of completion is measured by reference to the contract costsincurred up to balance date as a percentage of total estimated costs for each contract.

Contract costs include all costs directly related to specific contracts, costs that are specifically chargeable to the customerunder the terms of the contract, and an allocation of overhead expenses incurred in connection with the group’s constructionactivities in general.

An expected loss on construction contracts is recognised immediately as an expense in the surplus or deficit.

Where the outcome of a contract cannot be reliably estimated, contract costs are recognised as an expense as incurred.When it is probable that the costs will be recovered, revenue is recognised to the extent of costs incurred.

Construction work in progress is stated at the aggregate of contract costs incurred to date plus recognised surpluses lessrecognised losses and progress billings. If there are contracts where progress billings exceed the aggregate costs incurredplus surpluses less losses, the net amounts are presented as a liability.

During the financial year ended 30 June 2017, Council did not enter into any deemed construction contracts for the purposesof PBE IPSAS 11.

Note 25 - Contingencies

Breakdown of contingent liabilities and further information

20162017ActualActual$000's$000's8000Miscellaneous non-insured claims390256Community pledges

3,6124,585Weather tightness claims1,3281,143Council guarantees6,1305,984Total contingent liabilities

Weather-tightness claimsThe weather tightness problem, commonly known as “leaky homes/buildings” refers to those buildings where water haspenetrated the building envelope or cladding system and is not able to drain or dry for some time, thus damaging the building.

The term “leaky homes claims” refers to claims against the Council for damages relating to a leaky building. Where the Councilhas failed to discharge its duty of care when providing building control services and loss has been suffered as a result, theCouncil may be found negligent. This is the basis for claims for damages against the Council.

The term "leaky homes claims" has also been extended to include cases where owners have opted for the Government'sfinancial assistance package scheme. The Government has established a financial assistance package (FAP) for owners ofleaky homes to get their homes fixed outside of the weather tightness tribunal or courts processes. Under the FAP, centralgovernment meets 25% of eligible homeowners' agreed repair costs, with local authorities contributing 25% and homeownersfunding the remaining 50%, with a loan guarantee underwritten by the Crown, provided applicants can meet bank lendingcriteria.

Homeowners who participate in the scheme would forgo the right to sue the Council or the Crown. Ultimately, it is the choiceof homeowners to sue or otherwise participate in the financial assistance package. Where claimants elect to sue, the Councilmust accordingly defend whilst maintaining a preference, where possible, to settle claims without the need for a hearing anda protracted litigation suit.

Settlement amounts for leaky homes claims are not covered by insurance.

There are 12 current claims; 8 of these are part of the FAP scheme. Only 8 claims were registered on the Ministry of Business,Innovation and Employment website as active as at 30 June 2017 (2016: 12 claims) The amounts sought by the claimants ofthese unsettled claims total to $4,893,410 including two unknown amounts (2016: $4,638,410 including two unknown amounts).


A provision for $350,162 has been recognised for accounting purposes for the potential settlement of claims that have beennotified to Council at balance date (for further information see Note 23 Provisions) (2016: $1,026,352). However, based on theinformation obtained during this financial year (and that of previous years), the Council has estimated that it may be liable fora further $4,584,558 in settlement costs (2016: $3,612,058).

Council guaranteesThe Council is listed as a guarantor to two organisations. The Council is obligated under the guarantee to make loan paymentsin the event that any of these organisations default on a loan arrangement.

The terms and conditions of the guarantee require:

The organisations to provide the Council with a copy of their annual report to enable the financial stability to be assessedon an annual basis, andAn indemnity to the Council that transfer's ownership of the assets to the Council in the event of the guarantee beingcalled up.

The Council’s exposure to any risk is therefore mitigated and considered minimal.

Council guarantees have not been recognised as liabilities in the statement of financial position as the Council consider thereis very little probability that any expenditure will be incurred to settle them.

Native lands agreementIn 1877 the Thames Borough Council entered an agreement with local iwi for the purchase of land required for the Paeroa-Thameshighway. As part of the agreement the Council agreed that any land owned by iwi would be exempt from rates indefinitely. TheMaori Land Court subsequently ruled that the agreement was ultra vires Council’s statutory powers. The Council has assessedrates on properties affected by the agreement for a number of years.

In 1999, the Council reviewed the background to this issue and agreed to enter into discussions with iwi to explore ways ofsettling the grievance issues that they have with the Council in relation to this matter. These discussions are now nearing aconclusion and a settlement agreement has now been drafted but not yet finalised.

As at 30 June, Council anticipates that an exemption from all rates in respect of parcels of land owned by the affected partiesmay be applied in perpetuity. In addition to this Council also anticipates the transfer of a local Thames reserve.

However, as the amount of the rates exemption can not be measured with sufficient reliability, and a local bill will be requiredto be passed in order for the land transfer to be gifted and its associated reserve status revoked, both obligations have been notedas a contingent liability accordingly.

Lees Road carparkDue to the significant popularity of Cathedral Cove as a national and international tourism destination, the community of Haheihas long suffered from major vehicle congestion. The Coromandel Walks programme has been designed to alleviate existingand future vehicle congestion issues in the surrounding Hahei area with the construction of a revenue generating car park atLees Road (thereby removing vehicles parking in the village itself).

After a number of significant investigations, a parcel of land was identified as the best location for a new car park due to thelocation, access and close proximity to the Cathedral Cove walkway. After two years of negotiations with the owners of theblock of land, Council reached an agreement with the owners in May 2016. Part of this agreement requires council to pay thefollowing:

A disturbance payment of $100,000; andA one-off payment of $50,000 for the construction of a kiosk/reception facility on site.

Both these items have been recognised as a provision (see Note 23 provisions). In addition to these two one-off payments,Council will also be liable for an annual easement fee based on the number of cars parked at the site per annum. However,as Council can not reliably estimate the amount of the obligation this amount has been recognised as a contingent liabilityaccordingly.

Thames Indoor Sports Facility - RoofThe Thames Indoor Sports Facility (TISF) project was approved in 2014 by the Thames Community Board and Council. It ispart of the Active Thames trilogy of projects - the other two being the skate park and Rhodes Park grandstand/club rooms.

The TISF project is a partnership with the Ministry of Education and Thames High School with the facility located on the schoolgrounds and encompasses an existing school structure. The new building comprises a two-court court space, foyer, administration,changing rooms, multi-purpose room, spectator seating and storage spaces. External works included roading and carparking,site services, paving and landscaping.


The total project budget stands at $5.5 million including the contingency outlined below. This budget includes an estimated$1.5 million in external funding made up of contributions from the school ($440,000), community fundraising ($332,000 of which$76,000 has already been received) and public grants ($725,000). As at 30 June 2017, $4.7 million had been spent to date.

Prior to the intended opening of the facility, it was found that the building itself had suffered frommoisture damage. Specifically,the design of the building made insufficient provision for ventilation. As a result, condensation had built up on the undersideof the roof surface and had made its way through the building paper and insulation (in the roof cavity) and had dripped ontothe playing surface in the gym. The moisture had damaged approximately 200 ceiling tiles and the roof itself requires a redesignin order to circumvent the problem. Initial estimates to fix the roof have been quoted as being in the vicinity of $350,000-$450,000.Council is currently persuing the matter via the professional services contract it has with the designer which required professionalindemnity insurance.

The contractor is also claiming an additional $177,000 for additional works relating to an extension of time and additionalphysical works, however these are yet to be verified by the engineer to the contract.

Until both matters are settled, Council is unable to measure its liability with sufficient reliability and as such both obligationshave been noted as contingent liabilities.

Thames Indoor Sports Facility - Community pledgesAs part of the risk mitigation strategy regarding non-receipt of community pledges a report was presented to the ThamesCommunity Board (29 February 2016) and Council (6 April 2016) to acknowledge the risks related to Community pledges andCouncil accepted the underwriting risk associated with recovering pledges after construction costs had been paid. As at 30June 2017, $256,000 of community pledges remained outstanding (2016: $390,000).

New Zealand Local Government Funding AgencyCouncil is a guarantor of the New Zealand Local Government Funding Agency Limited (LGFA). The LGFA was incorporatedin December 2011 with the purpose of providing debt funding to local authorities in New Zealand and it has a current creditrating from Standard and Poor’s of AA+.

The Council is one of 30 local authority shareholders and 14 local authority guarantors of the LGFA. In that regard it has uncalledcapital of $0.1 million. When aggregated with the uncalled capital of other shareholders, $20.0 million is available in the eventthat an imminent default is identified. Also, together with the other shareholders and guarantors, the Council is a guarantor ofall of LGFA’s borrowings. At 30 June 2017, LGFA had borrowings totalling $7.9 billion (2016: $6.5 billion).

Financial reporting standards require the Council to recognise the guarantee liability at fair value. However, the Council hasbeen unable to determine a sufficiently reliable fair value for the guarantee, and therefore has not recognised a liability. Councilconsiders the risk of LGFA defaulting on repayment of interest or capital to be very low on the basis that:

We are not aware of any local authority debt default events in New Zealand; andLocal government legislation would enable local authorities to levy a rate to recover sufficient funds to meet any debtobligations if further funds were required.

Reserve contribution creditsReserve contribution credits result from historical vesting of reserve land which was over and above the required reserve areafor the particular subdivision. Applications to recognise any potential historic reserve credits will be assessed on a case-by-casebasis when and if a further Resource Consent is granted for the property to which the credits relate. However estimating thevalue of these credits is uncertain because it relies on factors such as the future development potential of any residual land,future land values, the value of the land when vested, the zoning of the land and any other District Plan mechanism such asstructure plans and the reasons for the land being vested at the time.

Council has recognised that there are two developers that have reserve contribution credits available to them as at 30 June2017 should they proceed with any further development at a later date. However, at the time of writing this report, there wereno current land-use consents utilising these reserve contribution credits.

Employer contributions to defined contribution plansCouncil is a participating employer in the DBP Contributors Scheme (the scheme), which is a multi-employer defined benefitscheme. If the other participating employers ceased to participate in the scheme, the Council could be responsible for the entiredeficit of the scheme. Similarly, if a number of employers ceased to participate in the scheme, the Council could be responsiblefor an increased share of any deficit.

As at 31 March 2017, the scheme had a past service surplus of $8.0 million (exclusive of Employer Superannuation ContributionTax (2016: $11.7 million)). This surplus was calculated using a discount rate equal to the expected return on net assets, butotherwise the assumptions and methodology were consistent with requirements of PBE IPSAS 25. The actuary of the schemerecommended that the employer's contributions remain suspended.


Note 26 - Equity

Accounting PolicyEquity is the community’s interest in the Council and is measured as the difference between total assets and total liabilities.Equity is disaggregated and classified into the following components:

Accumulated fundsThe accumulated surpluses do not represent cash available to offset future rate increases, but rather it represents thecommunity’s investment in publicly owned assets resulting from past surpluses.

Restricted reservesRestricted reserves are a component of equity generally representing a particular use to which various parts of equityhave been assigned. Reserves may be legally restricted or created by the Council.

Restricted reserves include those subject to specific conditions accepted as binding by the Council and which may notbe revised by the Council without reference to the Courts or third parties. Transfers from these reserves may be madeonly for certain specified purposes or when certain specified conditions are met.

Property revaluation reservesThis reserve relates to the revaluation of property, plant and equipment to fair value.

Council created reservesCouncil created reserves are reserves restricted by Council decision. The Council may alter them without references toany third party or the Courts. Transfers to and from these reserves are at the discretion of the Council. The Council createdreserves consist of specifically named reserves into which funds are put for specific purposes, as well as reserves forunspent revenue from one year that the Council deems appropriate to be expended in the following year, usually to finishincomplete, but previously budgeted work. The Council created reserves also include reserves for depreciation that havebeen funded but not yet utilised.

Breakdown of equity and further information


Accumulated funds371,083377,046Balance at 1 July

0(383)Net movement in restricted reserves(2,781)2,047Net movement in Council created reserves1,954696Transfers from property revaluation reserves on disposal6,7909,281Surplus/(deficit) for the year

377,046388,686Balance at 30 JuneRestricted reserves

33,35733,357Balance at 1 July0682Transfers to accumulated funds0(299)Transfers from accumulated funds

33,35733,740Balance at 30 JuneCouncil created reserves

56,88059,661Balance at 1 July24,60223,883Transfers to accumulated funds(21,821)(25,930)Transfers from accumulated funds59,66157,614Balance at 30 June

Property revaluation reserves793,730809,427Balance at 1 July17,65297,513Net revaluation gains(1,954)(696)Transfer to accumulated funds on disposal of property

809,427906,244Balance at 30 JuneFair value through other comprehensive revenue and expense reserve

(5)8Balance at 1 July132Net revaluation gains/(losses)810Balance at 30 June

1,279,4981,386,293Total equity


Restricted reservesPurpose of restricted reserves and the activity it relates toRestricted reserves are reserves that are subject to specific conditions of use and whether under statute or accepted as bindingby Council, may not be revised without reference to the Courts or third parties. Transfers from these reserves may be madeonly for specified purposes or when certain specified conditions are met. Restricted reserves relate to the representation activity.

ClosingTransfers outTransfers inOpening$000's$000's$000's$000's

2017Reserve land

31,317(299)031,616Restricted by titleEndowment farms

2,42306821,741Endowment farms trust property - restricted imposed bystatute

33,740(299)68233,357Total restricted reserves2016Reserve land

31,6160031,616Restricted by titleEndowment farms

1,741001,741Endowment farms trust property - restricted imposed bystatute

33,3570033,357Total restricted reserves

Council created reservesPurpose of council created reserves and the activity it relates toCouncil created reserves are reserves created at the discretion of the Council.

The accumulated surpluses do not represent cash available to offset future rate increases, rather they represent the community’sinvestment in publicly owned assets resulting from past surpluses.

Council created reserves consist of:

Depreciation reserves;Local Government Act contribution reserves;Retained revenue reservesSpecial reserves

Depreciation reserves


20178,541(13,716)13,6528,604District732(2,011)8241,919Thames276(146)233189Coromandel0(1,017)1,0170Mercury Bay0(1,132)513620Tairua/Pauanui0(452)4520Whangamata

9,549(18,473)16,69111,332Total depreciation reserves2016

8,604(14,632)14,1349,102District1,919(1,118)7732,264Thames189(155)218126Coromandel0(1,150)990160Mercury Bay

620(234)504350Tairua/Pauanui0(480)42159Whangamata

11,332(17,769)17,04012,061Total depreciation reserves

Depreciation reserves contain funds equivalent to funded depreciation to be used to fund capital renewals work. Depreciationreserves relate to the representation, solid waste, wastewater, water, stormwater, public conveniences, district transportation,building control, cemeteries and all other activities not separately rated.


Local Government Act contribution reserves


2017158(838)1,068(73)District249(20)26243Thames106(37)12321Coromandel992(290)839444Mercury Bay23(8)35(4)Tairua/Pauanui702(403)751,030Whangamata

2,230(1,595)2,1651,661Total special LGA contribution reserves2016

(73)(1,300)1,495(268)District243(46)67222Thames21(375)80316Coromandel444(451)634261Mercury Bay(4)(37)66(33)Tairua/Pauanui

1,030(327)(14)1,371Whangamata1,661(2,536)2,3281,869Total special LGA contribution reserves

These reserves contain funds collected and distributed under the Council's Development Contributions Policy. These fundsmay only be applied to the funding of additional capacity capital expenditure for activities for which they were levied. LocalGovernment Act contribution reserves relate to representation, solid waste, wastewater, water, stormwater, public conveniences,district transportation, cemeteries, parks and reserves, libraries, local transportation, halls, airfields and swimming poolsactivities.

Retained revenue reserves


20178,049(1,050)1,4327,667District475(29)137366Thames178(35)78135Coromandel

2,277(291)6311,937Mercury Bay798(129)202725Tairua/Pauanui593(159)186565Whangamata

12,369(1,692)2,66611,395Total retained revenue reserves2016

7,667(507)1,8966,278District366(14)123257Thames135(16)46105Coromandel

1,937(1)5821,356Mercury Bay725(88)99714Tairua/Pauanui565(86)188463Whangamata

11,395(712)2,9349,173Total retained revenue reserves

These reserves contain unspent revenue from a previous year that was raised through rates or fees and charges to fund theCouncil activities. Under our fiduciary duty, we have an obligation to account for the funds collected and spent for each of theseactivities. At the end of the year, we reconcile what we received against what we spent. The shortfall or surplus either comesout of or goes into the retained earnings for the relevant activity. Retained revenue reserves relate to representation, solidwaste, wastewater, water, stormwater, harbour and all Council activities not separately rated.


Special reserves


201723,9280023,928Power New Zealand reserve

522(1,706)7001,528Disaster reserve20600206General purpose

1,466001,466Property2,668(9)9611,716Insurance excess

0000Special projects6003129Wastewater headworks250(66)105210Solid waste levy refunds140014Rates postponement5504213Roading subdivision0(24)240Ohuka park development contributions payment plan9009Thames water headworks

20300203Coromandel - water headworks9009Coromandel - water unused loan

30700307Whangamata - water headworks500(2,145)3202,325Thames general purpose

3,049003,049Land subdivision103(8)0111Off street parking(0)(211)14566Hot Water Beach parking

11703384Whitianga Harbours33,465(4,169)2,36235,273Total - special reserves

201623,9280023,928Power New Zealand reserve1,528(252)5001,280Disaster reserve20600206General purpose

1,4660679787Property1,71606391,077Insurance excess

0000Special projects290029Wastewater headworks210(35)100145Solid waste levy refunds140113Rates postponement130013Roading subdivision9009Thames water headworks

20300203Coromandel - water headworks9009Coromandel - water unused loan

30700307Whangamata - water headworks2,325(304)3212,308Thames general purpose3,049(200)293,220Land subdivision11100111Off street parking66(13)079Hot Water Beach parking8403153Whitianga Harbours

35,273(804)2,30033,776Total - special reserves

Special reserves are council created reserves set aside for a special purpose as follows:

Power New Zealand reserve - funded by proceeds from the sale of Power NZ shares to fund internal borrowing. Thecorresponding interest earned subsidises the UAGC rate requirement. The Power New Zealand reserve relates to therepresentation activity.Disaster reserve fund - funds repairs to infrastructure caused by natural disasters. The disaster reserve fund relates toall infrastructure activities.General purpose - funds any one off, unbudgeted, Community Board projects as approved by the Council. The generalpurpose reserve relates to all community spaces activities.Property - funds the acquisition cost of any future strategic purchases of the same type of assets, when and whererequired, funded by amounts realised from the sale of surplus land and buildings.Insurance excess - funds the insurance excess of any legal settlements within building control, community health &safety, land use management and land information memoranda activities.Special projects - funds special 'one-off' community board projects as approved by the Council. The special projectsreserve relates to all community spaces activities.Wastewater headworks - funds the increased level of service component of various wastewater projects within thewastewater activity, funded by contributions collected under the Resource Management Act.


Solid waste levy refunds - funds any waste minimisation initiative in the solid waste activity.Rates postponement - funds any shortfall between the amount realised on the sale of a property and any amountsoutstanding for postponed rates (and accrued charges) at the time of sale. The rates postponement reserve relates tothe representation activity.Roading subdivision - helps fund various roading projects and other initiatives within the roading activity, funded bycontributions collected under the Resource Management Act.Thames - general purpose - funds non-infrastructural asset purchases within the Thames-urban area activities.Land subdivision - funds the acquisition, or development of parks and reserves within the relevant catchment areas,funded by reserve contributions collected under the Resource Management Act. Land subdivision reserves relate to theparks and reserves activities.Water headworks - fund the increased level of service component of projects within the water activity within the relevantcatchment areas, funded by reserve contributions collected under the Resource Management Act.Off-street parking - funds the acquisition, or development of, parking areas within the relevant catchment areas, fundedby reserve contributions collected under the Resource Management Act. The off-street parking reserve relates to thelocal roading and parks and reserves activities.Water unused loan - balance of loan raised to fund water extension, relates to the water activity.

Total council created reservesClosingTransfers outTransfers inOpening$000's$000's$000's$000's57,614(25,930)23,88359,661For the period ending 30 June 201759,661(21,821)24,60256,880For the period ending 30 June 2016

Property revaluation reserves20162017

ActualActual$000's$000's

Property revaluation reserves for each asset class consist of14,98916,914Buildings5,7006,197Footpaths2,8592,380Harbour facilities

230,359288,039Land5,6576,859Reserve improvements7,4077,138Bridges

360,315392,703Roads2,1162,205Solid waste

64,92966,142Stormwater51,05051,760Wastewater64,04765,907Water809,427906,244Closing property revaluation reserves


Additional disclosureCapital managementThe Council's capital is its equity (or ratepayers' funds), which comprise accumulated funds and reserves. Equity is representedby net assets.

The LGA requires Council to manage its revenues, expenses, assets, liabilities, investments and general financial dealingsprudently and in a manner that promotes the current and future interests of the community. Ratepayer's funds are largelymanaged as a by-product of managing revenues, expenses, assets, liabilities, investments, and general financial dealings.

The objective of managing these items is to achieve intergenerational equity, which is a principle promoted in the LGA andapplied by the Council. Intergenerational equity requires today's ratepayers to meet the costs of utilising the Council's assetsand not expecting them to meet the full cost of long-term assets that will benefit ratepayers in future generations. Additionally,the Council has in place asset management plans for major classses of assets detailing renewal and maintenance programmes,to ensure that ratepayers in future generations are not required to meet the costs of deferred renewals and maintenance.

The LGA requires the Council to make adequate and effective provision in its Long-TErm Plan (LTP) and in its annual plan(where applicable) to meet the expenditure needs identified in those plans. The LGA also sets out the factors that the Councilis required to consider when determining the most appropriate sources of funding for each of its activities. The sources andlevels of funding are set out in the funding and financial policies in the Council's LTP.

The Council has the following Council-created reserves:

reserves for different areas of benefit;self-insurance reserves; andtrust and bequest reserves.

Reserves for different areas of benefit are used where there is a discrete set of rate or levy payers as distinct for payers ofgeneral rates. Any surplus or deficit relating to these separate areas of benefit is applied to the specific reserves.

Self-insurance reserves are built up annually from general rates and are made available for specific unforeseen events. Therelease of these funds can generally be approved only by the Council.

Trust and bequest reserves are set up where the Council has been donated funds that are restricted for particular purposes.Interest is added to trust and bequest reserves where applicable, and deductions are made where funds have been used forthe purpose they were donated.


Note 27 - Related party transactions

Related party disclosures have not been made for transactions with related parties that are within a normal supplier orclient/recipient relationship on terms and conditions no more or less favourable that those that it is reasonable to expect theCouncil would have adopted in dealing with the party at arm's length in the same circumstances.

Related party disclosures have also not been made for transactions with entities within the Council (such as funding andfinancing flows for TVEOA), where the transactions are consistent with the normal operating relationships between the entitiesand are on normal terms and conditions for such transactions.


Key management personnel compensationCouncillors

409426Remuneration99Full-time equivalent members

Senior Management Team, including the Chief Executive2,0032,082Remuneration

1010Full-time equivalent members2,4122,508Total key management personnel remuneration

1919Total full-time equivalent personnel

Due to the difficulty in determining the full-time equivalent for Councillors, the full-time equivalent figure is taken as the numberof Councillors.

Related party transactions required to be disclosedThere are no other related party transactions that are required to be disclosed in accordance with PBE IPSAS 20 Related PartyDisclosures. However, the Council has elected to recognise its relationship with both the Hauraki Rail Trail Charitable Trustand Destination Coromandel as related parties.


Payments to associatesDestination Coromandel:

567572Contribution for services provided by Destination CoromandelHauraki Rail Trail Charitable Trust:

6630Contribution for services provided by Hauraki Rail Trail Charitable Trust633602Total payments made to associates

Note 28 - Events after balance dateThere have been no post balance date events up to the date of adoption of the Annual Report that are know to have a materialeffect on the financial statements and notes to the financial statements of the Council.


Note 29 - Financial instrumentsFinancial instrument categoriesThe accounting policies for financial instruments have been applied to the line items below:

20162017ActualActual$000's$000'sFinancial assets

Loans and receivables1,00995Cash and cash equivalents6,7408,717Receivables

Other financial assets560560Borrower notes from Local Government Funding Agency8699Term deposits

8,3959,471Total loans and receivablesFair value through other comprehensive revenue and expenseOther financial assets

271272Unlisted shares271272Total fair value through other comprehensive revenue and expense

20162017ActualActual$000's$000'sFinancial liabilities

Fair value through surplus or deficit - held for trading6,4074,568Derivative financial instrument liabilities6,4074,568Total fair value through surplus or deficit - held for trading

Financial liabilities at amortised cost12,53715,912Payables

Borrowings00Finance lease liabilities

35,00035,200Secured loans47,53751,112Total financial liabilities at amortised cost

Fair value hierarchy disclosuresFor those instruments recognised at fair value in the statement of financial position, fair values are determined according tothe following hierarchy:

Quoted market price (level 1) - Financial instruments with quoted prices for identical instruments in active markets.Valuation technique using observable inputs (level 2) - Financial instruments with quoted prices for similar instrumentsin active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valuedusing models where all significant inputs are observable.Valuation techniques with significant non-observable inputs (level 3) - Financial instruments valued using models whereone or more significant inputs are not observable.

The following table analyses the basis of the valuation of classes of financial instruments measured at fair value on the statementof financial position:

Valuation techniqueNon-observable

inputsObservable

inputsQuoted market

priceTotal

$000's$000's$000's$000's2017Financial assets

27200272SharesFinancial liabilities

04,56804,568Derivatives2016Financial assets

27000270SharesFinancial liabilities

06,40706,407Derivatives


There were no transfers between the different levels of the fair value hierarchy.

Valuation techniques with significant non-observable inputs (level 3)The table below provides reconciliation from the opening balance to the closing balance for the level 3 fair value measurements:

20162017ActualActual$000's$000's257270Balance at 1 July00Gains and losses recognised in the surplus or deficit132Gains and losses recognised in other comprehensive revenue and expense00Purchases00Sales00Transfers into level 300Transfers out of level 3

270272Balance at 30 June

Changing a valuation assumption to a reasonable possible alternative assumption would not significantly change fair value.

Financial instrument risksThe Council's activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk.The Council has a series of policies to manage the risks associated with financial instruments and seeks to minimise exposurefrom its treasury activities. The Council has established Council-approved liability management and investment policies. Thesepolicies do not allow any transactions that are speculative in nature to be entered into.

Market riskPrice riskPrice risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in marketprices.

The Council is not exposed to equity securities price risk on its investments.

Currency riskCurrency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreignexchange rates.

The Council may purchase plant and equipment associated with the construction of certain infrastructural assets from overseas,which require it to enter into transactions denominated in foreign currencies. As a result of these activities, exposure to currencyrisk arises.

It is the Council's policy to manage foreign currency risks arising from contractual commitments and liabilities that are above$100,000 by entering into forward foreign exchange contracts to manage the foreign currency risk exposure. This means theCouncil is able to fix the New Zealand dollar amount payable prior to delivery of the plant and equipment from overseas.

Fair value interest rate riskFair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interestrates. Borrowings and investments issued at fixed rates of interest expose the Council to fair value interest rate risk. TheCouncil’s liability management policy outlines the level of borrowing that is considered acceptable using fixed rate instruments.In the normal course of business, any long-term debt is at floating interest rates. Short-term borrowing and investments aresubject to normal market fluctuations.

Cash flow interest rate riskCash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate because of changes in marketinterest rates. Borrowings and investments issued at variable interest rates expose the Council to cash flow interest rate risk.

Generally, the Council raises long-term borrowings at floating rates and swaps them into fixed rates using interest rate swapsin order to manage the cash flow interest rate risk. Such interest rate swaps have the economic effect of converting borrowingsat floating rates into fixed rates that are generally lower than those available if the Council borrowed at fixed rates directly.Under the interest rate swaps, the Council agrees with other parties to exchange, at specified intervals, the difference betweenfixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional principal amounts.


Credit riskCredit risk is the risk that a third party will default on its obligation to the Council causing it to incur a loss. Due to the timing ofits cash inflows and outflows, surplus cash is invested into term deposits which give rise to credit risk. The Council also providesfinancial guarantees, which gives risk to credit risk.

The Council’s investment policy limits the amount of credit exposure to any one financial institution or organisation. The Councilreduces its exposure to credit risk by only placing investments in accordance with its investment policy which ensures dispersionand minimisation of risk. The Council invests funds only with entities that have a Standard and Poor's credit rating of at leastA1 for short-term and A+ for long-term investments. The Council has no collateral or other credit enhancements for financialinstruments that give rise to credit risk.

Maximum exposure to credit riskThe Council's maximum credit risk exposure for each class of financial instrument is as follows:

20162017ActualActual$000's$000's1,095194Cash at bank and term deposits6,7408,717Receivables1,2501,188Financial guarantees9,08510,099Total maximum exposure to credit risk

The Council is exposed to credit risk as a guarantor of all of LGFA's borrowings. Information about this exposure is explainedin Note 25 Contingent Liabilities.

Credit quality of financial assetsThe credit quality of financial assets that are neither past due nor impaired have been assessed by reference to Standard andPoor’s credit rating’s (if available) or to historical information about counterparty default rates:


Cash at bank and term deposits1,095194AA-1,095194Total cash at bank and term deposits

Receivables mainly arise from the Council’s statutory functions. Therefore, there are no procedures in place to monitor or reportthe credit quality of debtors receivables with reference to internal or external credit ratings. The Council has no significantconcentrations of credit risk in relation to receivables, as it has a large number of credit customers, mainly ratepayers, and theCouncil has powers under the Local Government (Rating) Act 2002 to recover outstanding debts from ratepayers.

Liquidity riskManagement of liquidity riskLiquidity risk is the risk that the Council will encounter difficulty raising liquid funds to meet commitments as they fall due.Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amountof committed credit facilities and the ability to close out market positions. The Council aims to maintain flexibility in funding bykeeping committed credit lines available.

In meeting its liquidity requirements, the Council maintains a target level of investments that must mature within the next 12months. The Council manages its borrowings in accordance with its funding and financial policies, which includes a liabilitymanagement policy.

Contractual maturity analysis of financial liabilities, excluding derivativesThe following table analyses the Council's financial liabilities into relevant maturity groupings based on the remaining periodat balance date to the contractual maturity date. Future interest payments on floating rate debt are based on the floating rateon the instrument at balance date. The amounts disclosed are the contractual undiscounted cash flows and include interestpayments.


More than5 years1-5 yearsLess than

1 yearContractualcashflows

Carryingamount

$000's$000's$000's$000's$000's2017

0014,80614,80614,806Payables028,93312,83441,76741,767Secured loans00000Finance leases001,1881,1881,188Financial guarantees028,93328,82857,76157,761Total

20160012,89512,89512,895Payables

8,00030,1003,00041,10041,100Secured loans00000Finance leases001,2501,2501,250Financial guarantees

8,00030,10017,14555,24555,245Total

The Council is exposed to liquidity risk as a guarantor of all of LGFA’s borrowings. This guarantee becomes callable in theevent of the LGFA failing to pay its borrowings when they fall due. Information about this exposure is explained in Note 25contingent liabilities.

Contractual maturity analysis of derivative financial instrument liabilitiesThe table below analyses the Council's derivative financial instrument liabilities that are settled on a net basis into their relevantmaturity groupings based on the remaining period at balance date to the contractual maturity date. The amounts disclosed arethe contractual undiscounted cash flows.



Assetcarryingamount

Liabilitycarryingamount

$000's$000's$000's$000's$000's$000's2017

6182,6471,3034,56804,568Nett settled derivative liabilities6182,6471,3034,56804,568Total

20161,3153,8231,2696,40706,407Nett settled derivative liabilities1,3153,8231,2696,40706,407Total

Contractual maturity analysis of financial assetsThe table below analyses the Council's financial assets into relevant maturity groupings based on the remaining period atbalance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows, and includeinterest receipts.



Carryingamount

$000's$000's$000's$000's$000's2017

00959595Cash and cash equivalents008,7178,7178,717Receivables

Other financial assets00999999Term deposits008,9118,9118,911Total

2016001,0091,0091,009Cash and cash equivalents006,7406,7406,740Receivables

Other financial assets00868686Term deposits007,6927,8357,835Total

Sensitivity analysisThe following table illustrates the potential effect on the surplus or deficit and equity (excluding accumulated funds) for reasonablypossible market movements, with all other variables held constant, based on the Council's financial instrument exposures atthe balance date.


+100bps-100bpsOtherequitySurplusOther

equitySurplus

$000's$000's$000's$000'sInterest rate risk2017Financial assets

010(1)Cash and cash equivalents010(1)Term deposits

Financial liabilities01,8050(1,933)Derivatives - held for trading01,8070(1,935)Total sensitivity

2016Financial assets

020(1)Cash and cash equivalents01(1)Term deposits

Financial liabilities02,2490(2,322)Derivatives - held for trading02,2520(2,324)Total sensitivity

Explanation of interest rate risk sensitivityThe interest rate sensitivity is based on a reasonable possible movement in interest rates, with all other variables held constant,measured as a basis points (bps) movement. For example, a decrease in 100 bps is equivalent to a decrease in interest ratesof 1%. The sensitivity for derivatives (interest rate swaps) has been calculated using a derivative valuation model based on aparallel shift in interest rates of -100bps/+100bps (2016: -100bps/+100bps).

All Council's borrowings are hedged derivative financial instruments so the sensitivity analysis of derivatives apply.


Note 30 - Explanations of major variances against budgetStatement of comprehensive revenue and expense

Revenue

There has been a substantial rise in the completion of subdivisions resulting in an unanticipatedincrease in vested asset of $2.5 million. In addition to this Council has recovered approximately$0.7 million in costs previously incurred. These costs were in relation to the comer's road fire,legal expenditure and local body elections.

Other Revenue

Other comprehensive revenue and expense

We budgeted for a gain on revaluation but the actual asset revaluation movements were higherthan budgeted. This is mainly attributable to the increase in land value across the district.

Gain on property, plantand equipmentrevaluations

Statement of financial position

Assets

Property, plant and equipment is $63 million higher than budgeted. This is mainly attributableto the increase in land value across the district.

Property, plant andequipment

Liabilities

The closing payables position is $3.7 million higher than budgeted. One supplier experienceddifficulties in preparing their invoices on time due to a software issue, as such $3.3 million worthof invoices that related to the 2016-17 financial year were not received until year end.

Payables

Due to the inherent difficulties in prediction valuation derivatives, Council does not budget forthe movement in derivative financial instruments.

Derivative financialinstruments

Provisions are $2.5 million less than budgeted. This can mainly be attributed to a reduction inour weather tightness provision of $2.3 million.

Provisions

Our total debt is $12.5 million less than budgeted. The difference is due to Council forecastinga higher opening debt position by $3.2 million and under expenditure in Council's capital worksprogramme of $4.7 million. In addition to this Council also did not spend the budgetedexpenditure of $1.9 million on the Great Walks programme, which was anticipated to be loanfunded. Council also received additional unbudgeted funds of $2.2 million.

Borrowings


Funding impact statements disclosureIntroductionSchedule 10 of the Local Government Act 2002 requires Council to include in the annual report a funding impact statement foreach group of activities and a funding impact statement for the whole of council for the financial year to which the report relates.The format of these statements are prescribed by the legislation and do not have to meet the normal accounting requirements.The intention is that this format provides a more understandable picture of what Council is spending money on and how thosecosts are funded.

Funding impact statements | Ngā Tauakī Whakaaweawe PūteaWhole of Council funding impact statementFor the year ended 30 June 2017

2017201720162016

ActualAnnualplan

Annualreport

Annualplan

$000's$000's$000's$000'sSource of operating funding

16,25315,54914,77814,185General rates, uniform annual general charges, rates penalties43,85145,82743,89044,375Targeted rates3,7443,5742,9143,969Subsidies and grants for operating purposes12,64310,06111,8189,969Fees and charges

162128412Interest and dividends from investments1,240759745718Local authorities fuel tax, fines, infringement fees and other receipts77,89375,78374,22873,228Total operating funding (A)

Applications of operating funding59,13459,07352,33958,856Payments to staff and suppliers2,2022,6362,4823,179Finance costs

0000Other operating funding applications61,33661,70954,82062,035Total applications of operating funding (B)16,55714,07419,40811,193Surplus(deficit) of operating funding (A - B)

Source of capital funding4,9885,0653,0724,378Subsidies and grants for capital expenditure2,1321,6672,3311,497Development and financial contributions2009,394( 6,100 )4,072Increase/(decrease) in debt1591567420Gross proceeds from sale of assets0000Lump sum contributions0000Other dedicated capital funding

7,48016,281469,948Total sources of capital funding (C)Application of capital fundingCapital expenditure

1,3781,1941,086949- to meet additional demand12,45115,0925,55110,084- to improve the level of service11,62914,14910,9749,997- to replace existing assets( 1,421 )( 80 )1,843111Increase/(decrease) in reserves

0000Increase/(decrease) in investments24,03730,35519,45421,141Total applications of capital funding (D)

( 16,557 )( 14,074 )( 19,408 )( 11,193 )Surplus(deficit) of capital funding (C - D)0000FUNDING BALANCE ((A - B) + (C - D))


Roads and footpaths funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan

$000's$000's$000'sSource of operating funding

4,9543,7573,5931General rates, uniform annual general charges, rates penalties3,5563,9803,825Targeted rates3,4112,5022,380Subsidies and grants for operating purposes1589088Fees and charges588531570Internal charges and overheads recovered428411402Local authorities fuel tax, fines, infringement fees and other receipts

13,09511,27110,858Total operating funding (A)Applications of operating funding

8,8876,8847,7172Payments to staff and suppliers118263185Finance costs

1,1621,2361,154Internal charges and overheads applied000Other operating funding applications

10,1678,3829,055Total applications of operating funding (B)2,9282,8891,803Surplus(deficit) of operating funding (A - B)

Source of capital funding3,1003,4943,338Subsidies and grants for capital expenditure271335303Development and financial contributions9742,3122,9543Increase/(decrease) in debt4200Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding


405547552- to meet additional demand2,3312,1713,055- to improve the level of service5,2946,5485,7004- to replace existing assets(715)(236)(908)Increase/(decrease) in reserves

000Increase/(decrease) in investments7,3159,0308,399Total applications of capital funding (D)(2,928)(2,889)(1,803)Surplus(deficit) of capital funding (C - D)

000FUNDING BALANCE ((A - B) + (C - D))

Significant variances explained

1. General rates for roading increased by $1.2 million from the 2017 Long-Term Plan budget because we didn't spend whatwe planned on capital expenditure that was eligible for a subsidy.

2. Payments to suppliers are higher than the 2017 Long-Term Plan budget but are in line with the 2017 Annual Plan budget.We budgeted for costs associated with storm damage, Hauraki cycleway and additional costs on area-wide pavementtreatment that was not budgeted for in the Long-Term Plan.

3. The increase in debt is less than budgeted in the Long-Term Plan meaning that we did not need to borrow as much asanticipated.

4. We spent less than budgeted in the Long-Term Plan on area-wide pavement treatment.


Stormwater funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan


921928966General rates, uniform annual general charges, rates penalties2,1082,1762,262Targeted rates

000Subsidies and grants for operating purposes000Fees and charges000Internal charges and overheads recovered000Local authorities fuel tax, fines, infringement fees and other receipts


799765732Payments to staff and suppliers67105176Finance costs732736836Internal charges and overheads applied000Other operating funding applications


Source of capital funding000Subsidies and grants for capital expenditure755754Development and financial contributions

(1,110)(437)(2,731)Increase/(decrease) in debt000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

(1,035)(380)(2,677)Total sources of capital funding (C)Application of capital fundingCapital expenditure

000- to meet additional demand266667921- to improve the level of service340451425- to replace existing assets(211)0(2,539)Increase/(decrease) in reserves

000Increase/(decrease) in investments3961,118(1,193)Total applications of capital funding (D)

(1,431)(1,498)(1,484)Surplus(deficit) of capital funding (C - D)000FUNDING BALANCE ((A - B) + (C - D))


Wastewater funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan



000Subsidies and grants for operating purposes41300Fees and charges000Internal charges and overheads recovered3100Local authorities fuel tax, fines, infringement fees and other receipts


7,5256,5316,240Payments to staff and suppliers1,3641,8611,929Finance costs3,4002,9743,304Internal charges and overheads applied

000Other operating funding applications12,28911,36611,473Total applications of operating funding (B)3,3864,4994,278Surplus(deficit) of operating funding (A - B)

Source of capital funding000Subsidies and grants for capital expenditure

415465420Development and financial contributions(3,991)(4,020)(3,779)Increase/(decrease) in debt

000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

(3,576)(3,555)(3,359)Total sources of capital funding (C)Application of capital fundingCapital expenditure

14863101- to meet additional demand618445438- to improve the level of service521602560- to replace existing assets

(1,477)(166)(180)1Increase/(decrease) in reserves000Increase/(decrease) in investments

(190)944919Total applications of capital funding (D)(3,386)(4,499)(4,278)Surplus(deficit) of capital funding (C - D)



1. Our reserves decreased because we spent funds to repair our wastewater assets in Whangamata that were damagedby the April storm.


Water supply funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan



000Subsidies and grants for operating purposes1,4571,4951,494Fees and charges

000Internal charges and overheads recovered000Local authorities fuel tax, fines, infringement fees and other receipts





Source of capital funding000Subsidies and grants for capital expenditure

313134115Development and financial contributions64107225Increase/(decrease) in debt900Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

386241340Total sources of capital funding (C)Application of capital fundingCapital expenditure

26046- to meet additional demand1,086828805- to improve the level of service1,9471,420874- to replace existing assets(218)7371,173Increase/(decrease) in reserves

000Increase/(decrease) in investments2,8412,9852,898Total applications of capital funding (D)(2,455)(2,744)(2,558)Surplus(deficit) of capital funding (C - D)



Solid waste funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan


1,2451,0461,049General rates, uniform annual general charges, rates penalties2,9762,9542,810Targeted rates

000Subsidies and grants for operating purposes3,0052,0842,037Fees and charges

000Internal charges and overheads recovered000Local authorities fuel tax, fines, infringement fees and other receipts


5,4584,7544,635Payments to staff and suppliers88144122Finance costs858825806Internal charges and overheads applied000Other operating funding applications

6,4045,7235,563Total applications of operating funding (B)822361333Surplus(deficit) of operating funding (A - B)

Source of capital funding17800Subsidies and grants for capital expenditure12500Development and financial contributions(77)1,525(109)1Increase/(decrease) in debt000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

2261,525(109)Total sources of capital funding (C)Application of capital fundingCapital expenditure

000- to meet additional demand357498103- to improve the level of service271,520262- to replace existing assets663(132)96Increase/(decrease) in reserves000Increase/(decrease) in investments

1,0471,886224Total applications of capital funding (D)(822)(361)(333)Surplus(deficit) of capital funding (C - D)



1. We spent less than budgeted on capital expenditure which meant that we didn't need to borrow as much as anticipated.2. In the Long-Term Plan we budgeted to replace the Whitianga Transfer Station. However, the project was deferred until

investigations into a suitable site have been completed.


Representation funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan


3,7053,5842,700General rates, uniform annual general charges, rates penalties8279461,555Targeted rates500Subsidies and grants for operating purposes100Fees and charges

1,1321,3351,418Internal charges and overheads recovered625656Local authorities fuel tax, fines, infringement fees and other receipts




5,8535,9115,735Total applications of operating funding (B)(121)10(5)Surplus(deficit) of operating funding (A - B)

Source of capital funding000Subsidies and grants for capital expenditure151311Development and financial contributions1117(1)Increase/(decrease) in debt000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

1262010Total sources of capital funding (C)Application of capital fundingCapital expenditure

000- to meet additional demand000- to improve the level of service710221- to replace existing assets(2)(72)(16)Increase/(decrease) in reserves000Increase/(decrease) in investments5305Total applications of capital funding (D)

121(10)5Surplus(deficit) of capital funding (C - D)000Funding balance ((A - B) + (C - D))


Planning and regulation funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan


2,9863,1052,964General rates, uniform annual general charges, rates penalties379304304Targeted rates000Subsidies and grants for operating purposes

5,0614,1904,144Fees and charges1,0911,1051,212Internal charges and overheads recovered

872020Local authorities fuel tax, fines, infringement fees and other receipts9,6058,7248,644Total operating funding (A)

Applications of operating funding5,8365,4125,336Payments to staff and suppliers

3178Finance costs3,8933,4603,404Internal charges and overheads applied

000Other operating funding applications9,7328,8888,747Total applications of operating funding (B)(128)(164)(103)Surplus(deficit) of operating funding (A - B)


1,115347282Increase/(decrease) in debt10900Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

1,224347282Total sources of capital funding (C)Application of capital fundingCapital expenditure

000- to meet additional demand117167- to improve the level of service941836994- to replace existing assets38(669)(822)Increase/(decrease) in reserves000Increase/(decrease) in investments

1,096183179Total applications of capital funding (D)128164103Surplus(deficit) of capital funding (C - D)000FUNDING BALANCE ((A - B) + (C - D))


Protection of people and the environment funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan


2,1432,2252,132General rates, uniform annual general charges, rates penalties316467Targeted rates000Subsidies and grants for operating purposes

697542532Fees and charges574628683Internal charges and overheads recovered612243239Local authorities fuel tax, fines, infringement fees and other receipts


1,227791838Payments to staff and suppliers315845Finance costs


3,2923,0943,073Total applications of operating funding (B)765608580Surplus(deficit) of operating funding (A - B)

Source of capital funding000Subsidies and grants for capital expenditure000Development and financial contributions0471430Increase/(decrease) in debt000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding0471430Total sources of capital funding (C)

Application of capital fundingCapital expenditure

000- to meet additional demand46583426- to improve the level of service0058- to replace existing assets

719495526Increase/(decrease) in reserves000Increase/(decrease) in investments

7651,0781,010Total applications of capital funding (D)(765)(608)(580)Surplus(deficit) of capital funding (C - D)



Community spaces and development funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan



26551,588Subsidies and grants for operating purposes1,4771,4741,364Fees, charges and targeted rates for water supply4645251Internal charges and overheads recovered1900Local authorities fuel tax, fines, infringement fees and other receipts




8,97910,39912,430Total applications of operating funding (B)2,0251,578533Surplus(deficit) of operating funding (A - B)

Source of capital funding1,7101491,0402Subsidies and grants for capital expenditure918663593Development and financial contributions

2,2229771,9353Increase/(decrease) in debt000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding


799391251- to meet additional demand7,6292,1174,3294- to improve the level of service2,2791,9761,339- to replace existing assets(3,832)(1,119)(1,818)5Increase/(decrease) in reserves

000Increase/(decrease) in investments6,8753,3654,101Total applications of capital funding (D)(2,025)(1,578)(533)Surplus(deficit) of capital funding (C - D)

000FUNDING BALANCE ((A-B) + (C-D))


1. The Thames Indoor Sports Centre project was budgeted for as operating expenditure in the Long-Term Plan. However,a new leasing agreement for the land meant that we could recognise the cost as capital expenditure thereby reducingthe targeted rate requirement and operating expenditure.

2. We received grants for the Thames Skate Park and the Thames Indoor Sports Centre that were not budgeted for in theLong-Term Plan.

3. Debt increased because of the change in the way we funded the Thames Indoor Sports Centre project. Refer to explanation1 above.

4. The capital expenditure programme was revised and adopted as part of the 2016/2017 Annual Plan. The Thames IndoorSports Centre project budgeted for as operational expenditure in the Long-Term Plan was budgeted for as capitalexpenditure in the Annual Plan. Refer to explanation 1 above.

5. The revised capital expenditure programme was partly funded by reserves.


Economic development funding impact statementFor the year ended 30 June 2017

201720172016

ActualLong-termplan

Long-termplan


599859782General rates, uniform annual general charges, rates penalties645611612Targeted rates30200Subsidies and grants for operating purposes306716309Fees and charges389322338Internal charges and overheads recovered011Local authorities fuel tax, fines, infringement fees and other receipts


1,4401,8742,597Payments to staff and suppliers2110637Finance costs664743663Internal charges and overheads applied000Other operating funding applications

2,1252,7233,297Total applications of operating funding (B)115(214)(1,255)Surplus(deficit) of operating funding (A - B)


2593,4281,3251Increase/(decrease) in debt000Gross proceeds from sale of assets000Lump sum contributions000Other dedicated capital funding

2593,4281,325Total sources of capital funding (C)Application of capital fundingCapital expenditure

000- to meet additional demand01,04302- to improve the level of service

2722,09403- to replace existing assets1027670Increase/(decrease) in reserves000Increase/(decrease) in investments

3743,21470Total applications of capital funding (D)(115)2141,255Surplus(deficit) of capital funding (C - D)



1. Debt didn't increase as much as planned in the Long-Term plan because the Great Walks, Coromandel Sugarloaf Wharfand Broadband project budgets were revised in the 2016/2017 Annual Plan.

2. The Great Walks - Lees Road Seal Extension project budgeted for in the Long-Term Plan was deferred to the 2017/2018financial year as more time was needed for consultation.

3. The Coromandel Sugarloaf project budgeted for in the Long-Term Plan was deferred until work on the CoromandelHarbour Development Strategy has been completed.


Council ControlledOrganisations | Ngā Kūao ā te KauniheraInformation on Council Controlled OrganisationsCouncil Controlled Organisations (CCOs) are any organisation in which one or more local authorities control 50% or more ofthe voting rights or appoint 50% or more of the directors.

Council has an interest the following CCOs:

Local Authority Share Services Limited; andThe New Zealand Local Government Funding Agency.

Council resolved to exempt Destination Coromandel, Hauraki Rail Charitable Trust and the Thames Valley Emergency OperatingArea as a CCO in accordance with Section 7 of the Local Government Act 2002.

Outlined below are the significant policies and objectives, nature and scope of activities, key performance targets and outcomesfor the 2016-17 year for each organisation.

The key performance targets disclosed in the tables below for Local Authority Shared Services Limited and the New ZealandLocal Government Funding Agency Limited may be slightly different compared to the targets disclosed in the Long Term Plan(LTP) 2015-25. This either is due to the organisations having developed additional targets or modified the way in which theypresent the targets, since the LTP was prepared.

Waikato Local Authority Shared Services Limited (WLASS)OwnershipCouncil has a one-twelfth ordinary shareholding in WLASS (one share at $1,000). The Council also holds service shares inthe Waikato Region Aerial Photography Service (6,476 shares at $1), the Shared Valuation Data Service (108,015 shares at$1) and the Waikato Regional Transport Model (2,250 shares at $10) activities of the company. These service shareholdingsgive no rights to a share in the distribution of surplus assets, nor do they provide voting rights. The balance of the remainingshares is owned by other Local Authorities.

Representation (total members)1(12)

Significant policies and objectivesThe primary objective of the Company is to provide theWaikato region local authorities with a vehicle to develop shared servicesthat demonstrate a benefit to the ratepayers and provide those services to local authorities.

Gains have been realised by shareholders in the Shared Valuation Data Service (SVDS), the Waikato Regional TransportModel (WRTM) and through joint procurement contacts. Three new activities joinedWLASS on 1 July 2016 - RATA, theWaikatoBuilding Consent Group and Future Proof.

Nature and scope of activitiesThe company is used as an umbrella company to investigate opportunities for future development of shared services. Thespecific objectives of the company are agreed each year in accordance with the constitution and the Statement of Intent (SOI).During the past year, the Company has continued to focus on demonstrating the value that WLASS delivers to the shareholdingcouncils through procurement, facilitation of Waikato Mayoral Forum work streams and improving efficiency of the existingshared services operating under WLASS.

Key performance targetsPerformance targets are specified in the WLASS SOI for 2016-2017 and are summarised with the actual results below:

Actual outcomePerformance target

AchievedProcurementJoint procurement initiatives for goods and services for WLASS councils will be investigatedand implemented.

AchievedCollaborative projectsPriorities for collaboration are identified, business cases are developed for the highestpriority projects, and the projects are implemented.

AchievedExisting WLASS contractsExisting contracts are managed and renegotiated as required.

AchievedCash flow


Actual outcomePerformance target

The company shall maintain a positive cash flow.

AchievedCost controlAdministration expenditure shall be managed and monitored.

AchievedReportingSix monthly reports provided to shareholders.

Not applicable and partlyachieved (i)

Waikato Mayoral ForumThe company shall provide administrative support and updates on Mayoral Forumworkstreams to the Mayoral Forum.

AchievedShared Valuation Data Services (SVDS)The SVDS is reliable, well maintained and available to all users.

Not applicable (ii)InsuranceAchieve the relevant KPIs in Appendix 4 of the Insurance Brokerage contract with AON

AchievedRATAAll stakeholders are kept informed about RATA's projects and achievements and sub-regionaldata collection contracts deliver good quality data on roading assets.

AchievedWaikato Regional Transport Model (WRTM)The WRTM is reliable, well maintained and available to all users.

Not achieved (iii)Waikato Building Consent GroupProvide strategic direction and actively pursue improvements in Building Control acrossthe Waikato region.

AchievedFuture ProofAll stakeholders are kept informed about Future Proof's projects and achievements.

In progress (iv)Shareholder surveyShareholders are satisfied with the performance of WLASS.

AchievedReview of benefitsShareholders are informed of the benefits being provided to shareholding councils byWLASS.

i. The WLASS CEO is no longer responsible for updating the Mayoral Forum on progress with projects. All approvedinvoices, except one, were paid by the due date.

ii. Shareholders' survey is scheduled to be reported to the board on 26 August 2017.iii. Only seven of the eight audits scheduled were completed due to a lack of staff resources; and the audit and review of

the QA systems was not achieved within 12 months from the last completion date.iv. Shareholders' survey has been completed and is scheduled to be reported to the board on 26 August 2017.

A full copy of the WLASS annual report can be obtained from the Waikato Regional Council websitehttp://www.waikatoregion.govt.nz


Local Government Funding Agency (LGFA)OwnershipLGFA has 31 shareholders, comprising the New Zealand Government (20%) and 30 councils (80%).

Representation (total members)53 councils

Significant policies and objectivesLGFA operates with two primary objectives.

1. Optimising the debt funding terms and conditions for participating local authorities2. Monitoring the quality of the asset book so that it remains of a high standard by ensuring in understands each participating

local authority's financial position and the general issues confronting the Local Government sector.

Nature and scope of activitiesLGFA was established five and a half years ago to provide long-dated borrowing, certainty of access to markets and to reducethe borrowing costs for the local government sector.

Three councils joined LGFA in the 12-month period to June 2017, bringing the total number of council members to 53. Councilscan access flexible lending conditions by using the short-term lending and bespoke lending products. Councils can borrow forterms ranging from 30 days to 16 years at any time they wish to draw down. During the 12-month period to 30 June 2017LGFA lent $707 million on a bespoke basis to 29 councils. This was 49% of total term lending to its council members over thatperiod. Short-term borrowing by councils as at 30 June 2017 was $222 million comprising borrowing from 18 councils for termsbetween one and 12 months.

Key performance targetsPerformance targets are specified in the LGFA Statement of Intent (SOI) for 2016-2017 and are summarised with the actualresults below:

Actual outcomePerformance targets

AchievedProviding savings in annual interest costs for all participating local authorities.

AchievedMaking longer term borrowings available to participating local authorities.

AchievedEnhancing the certainty of access to debt markets for participating local authorities, subjectalways to operating in accordance with sound business practice.

AchievedOffering more flexible lending terms to participating local authorities.

AchievedLGFA will monitor the quality of the asset book so that it remains of a high standard by ensuringit understands each participating local authority's financial position and the general issuesconfronting the Local Government sector.

AchievedOperate with a view to making a profit sufficient to pay a dividend in accordance with its stateddividend policy set out in section 6 of the SOI.

AchievedProvide at least 50% of aggregate long term debt funding for participating local authorities.

AchievedIssue a new long-dated LGFA bond.

AchievedEnsure that its products and services are delivered at a cost that does not exceed the forecastfor issuance and operating expenses set out in section 4 of the SOI.

AchievedTake appropriate steps to ensure compliance with the Health and Safety at Work Act 2015.

AchievedMaintain LGFA's credit rating equal to the New Zealand Government sovereign rating whereboth entities are rated by the same rating agency.

AchievedAchieve the financial forecasts set out in section 4 (excluding the impact of AIL) of the SOI.

Not achieved (i)Meet or exceed the performance targets outlined in section 5 of the SOI.

AchievedComply with its treasury policy, as approved by the Board.


Two of the five performance targets were not achieved. The two not achieved were

LGFA's average cost of funds on debt issued relative to the average cost of funds for NZ Government Securities for the12-month period. This is dependent on the term of borrowing by councils as longer terms require longer issuance atwider spreads than for shorter dated issuance. What is more relevant is the average margin to swap.The average margin above LGFA's cost of funds charged to the highest rated participating local authorities for the period.This is dependent on the term of borrowing by councils as LGFA on-lending margin reflects a term structure premiumfor longer borrowing.

A full copy of the LGFA annual report can be obtained from the LGFA website at www.lgfa.co.nz.


Council policies | Ngā Kaupapa Here ā KauniheraContribution to decision-making by MāoriThis section outlines the steps the Council intends to take to foster the development of Māori capacity to contribute todecision-making processes.

The Thames-Coromandel District Council is obliged to ensure that Māori have the opportunity to participate in Councildecision-making processes. The Local Government Act 2002 sets out a clear purpose for local government – to promote social,economic, cultural and environmental well-being through local decision-making and action. Every day iwi, hapū, whānau andMāori communities are affected by decisions made by the Council. Much of what Council does is directly relevant to Māori andrequires good relationships at a local level.

The Council is required by the Act to:

establish and maintain opportunities for Māori to contribute to decision-making processes (particularly in relation to landand water bodies)ensure processes are in place for consulting with Māoriconsider ways in which they can foster the development of Māori capacity to contribute to decision-making processesprovide relevant information to Māori.

Steps to foster the development of Māori capacity to contribute to decision-makingThe Council intends to undertake the following steps, to foster the development of Māori capacity to contribute to itsdecision-making processes:

the Council will compile a database of those who wish to be considered Māori for the purposes of the Local GovernmentAct 2002. The Council will maintain a process to ensure this database is current and up to date.those persons who have identified themselves as Māori will be specifically targeted for consultation when the Councildecides that it wishes to consult. Where specific legislation requires specific consultation with Māori or tangata whenua,then the requirements of that specific legislation will override this step.the Council will identify key issues of particular interest to Māori.the Council will gather information on Māori perspectives about Council activities.the Council will consciously build on the good quality relationships that have already been established. Examples includethe development of further Memorandums of Understanding and relationships developed through other processes suchas the ResourceManagement Act, Coromandel Peninsula Blueprint project and the Council's strategic work programme.the Council will identify a work programme to progress items 1-5 above.the Council will progress the above work programme as staff time and funding allows.

Hauraki Treaty SettlementAs part of their Treaty of Waitangi settlement process, the Hauraki Collective (the Collective) and the Crown signed a FrameworkAgreement (Agreement) at WharekawaMarae, Kaiaua on 1 October 2010. Post-Treaty settlement arrangements within Haurakihave the potential to bring new challenges and opportunities to local government: opportunities to build and foster more enduringrelationships with better resourced iwi within Hauraki; challenges in terms of new co-governance/co-management frameworksand strategies arising from post settlement legislation that will most likely draw on existing models and experience.

The Hauraki Collective deed of settlement was initialled in December 2016, as were several of the individual deeds of settlementfor Hauraki iwi which include redress over areas in the Thames-Coromandel District. The clarity now provided by these deedsof settlement will allow Council to better engage with Hauraki iwi in the 2017/18 year and beyond. Council staff are now ableto create a draft work programme which includes estimates of time required and costs for use in the 2018-2028 Long TermPlan.

Such arrangements will have a significant impact on iwi contribution to the Council's decision-making. The Council regards itas important that the Treaty settlement arrangements, once known, be acknowledged and reflected in its intended approachto fostering Māori capacity to contribute to its decision-making processes.

The Council intends to review this Statement once the Treaty settlement outcomes are known. The revised Statement isintended to be included in the Council's draft 2018-2028 Long Term Plan.

What we did in 2016/17 to follow this policy1. In anticipation of the settlement of the Treaty of Waitangi claims for Hauraki iwi, local government agencies within the

rōhe of Hauraki iwi are, at the invitation of the Crown, participating in the settlement negotiations process. This participationincludes:

Governance level meetings with the Minister for Treaty of Waitangi Negotiations, the Chief Crown Negotiator, stafffrom the Office of Treaty Settlements, and the Hauraki Iwi Collective;Participation at officer level in the Crown Technical Working Group in developing governance and operationalprocesses including: Co-governance arrangement for theWaihou and Piako river catchments and for the CoromandelPeninsula;


Co-governance arrangements for key Crown reserves being transferred to individual Hauraki Iwi as cultural redress;Addressing TCDC specific matters arising through the Treaty settlement process.

2. A contact list for Resource Management Act consultation purposes is held by the Council and updated in July of eachyear. This has been used frequently as part of the District Plan review.

3. Appointment of iwi sanctioned commissioners to agency resource consent hearing panels where development proposalshave the potential to impact natural resources of significance to Hauraki iwi.

4. Staff have provided advice of bylaw and strategy consultations directly to the iwi and hapū on Council's contacts list forHauraki and will continue this direct contact into the future.

5. Appeals by Hauraki iwi to the Proposed District Plan have been engaged with in good faith and on a without prejudicebasis in an attempt to gain a better understanding of the relief sought and where possible reach agreement without courtassistance.


515 Mackay St, Thames 3500Private Bag, Thames 3540

Phone: 07 868 0200 Fax: 07 868 [email protected]

www.tcdc.govt.nz

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